Johnsoncab targets ₹14 crore for ₹98.2263 crore working-capital gap

Johnsoncab plans to direct ₹14 crore of initial public offering (IPO) net proceeds to working capital, against a FY27 gap estimated at ₹98.2263 crore. The company’s forecast assumes revenue rises 50.00% to ₹315.7111 crore, requiring more inventory and receivables while supplier credit is estimated at 16 days.

Why does Johnsoncab need ₹14 crore for working capital?

Johnsoncab needs additional working capital because its estimated FY27 funding gap is ₹98.2263 crore, compared with ₹77.7381 crore in FY26. Working capital is current assets less current liabilities, and Johnsoncab proposes to fund ₹14 crore of its FY27 requirement from IPO proceeds, with the balance to come from internal accruals, existing net worth and short-term bank borrowings.

Short-term borrowings are expected to be the largest FY27 funding source at ₹52.1315 crore, followed by ₹32.0948 crore of internal accruals or existing net worth. Internal accruals and existing net worth comprise liquidity generated from regular operations, including retained profits after operating expenses, taxes and routine working-capital needs, according to the filing. Short-term borrowings include cash-credit and other bank or financial-institution facilities used for operating needs.

The working-capital gap increased from ₹26.7283 crore in FY24 to ₹38.8501 crore in FY25 and ₹77.7381 crore in FY26. The FY27 estimate adds ₹20.4882 crore to the FY26 requirement, although that projected increase is below the ₹38.8880 crore incremental requirement recorded for FY26. Johnsoncab’s plan depends on the availability of the stated internal funds and short-term facilities through FY27.

What is driving Johnsoncab’s FY27 working-capital gap?

Johnsoncab’s projected FY27 working-capital gap arises principally from forecast revenue growth and the current assets needed to support that growth. Revenue from operations is estimated to rise to ₹315.7111 crore in FY27 from ₹210.4741 crore in FY26, a 50.00% increase that the company links to capacity expansion, larger orders, government and railway tenders, renewable-energy opportunities and continued order execution.

Inventory is projected to increase by ₹9.2824 crore to ₹60.4358 crore in FY27, while trade receivables are expected to rise by ₹11.3444 crore to ₹48.7018 crore. The two categories together would increase by ₹20.6268 crore, exceeding the projected ₹20.4882 crore increase in the working-capital gap because other current assets, advances and current liabilities also change. Johnsoncab says inventory is intended to support uninterrupted production, timely customer deliveries and procurement resilience for key raw materials.

Other current assets are estimated to rise from ₹4.09 lakh in FY26 to ₹2.831 crore in FY27. This category comprises fixed deposits held as margin money against bank guarantees, and Johnsoncab expects greater participation in government tenders to require more such deposits. Short-term loans and advances, including supplier advances and tax-credit receivables, are projected to increase from ₹3.8488 crore to ₹4.70 crore.

Johnsoncab’s revenue projection also relies on proposed additional installed capacity of 1,67,580 kilometres from the combined capacity of 79,950 kilometres as of March 31, 2026. The filing says planned plant and machinery, including new manufacturing capability, could allow Johnsoncab to accept larger orders and create additional revenue streams. The FY27 working-capital forecast therefore requires both capacity-expansion execution and conversion of additional production into sales and collections.

How will receivables, inventory and payables affect Johnsoncab’s FY27 funding need?

Johnsoncab estimates 109 net working-capital days in FY27, compared with 111 days in FY26 and 97 days in FY25. Net working-capital days equal trade-receivable days plus inventory days minus trade-payable days, measuring the period for which operating assets require funding after allowing for supplier credit.

The FY27 forecast assumes 50 receivable days, 76 inventory days and 16 payable days. Receivable days would be one day below FY26’s 51 days, and inventory days would also be one day below FY26’s 77 days. Payable days would fall by one day from 17 days in FY26, reducing the amount of supplier credit available to finance the operating cycle.

Trade receivables are projected to rise in rupee terms but decline as a share of revenue, to 15.43% in FY27 from 17.75% in FY26. Johnsoncab expects receivables of ₹48.7018 crore in FY27 against ₹37.3574 crore in FY26, and attributes the projected ratio moderation to a stabilising receivable cycle as operations expand. Its 50-day assumption is based on its credit policy, historical collections, industry practices and expected business growth.

Trade payables are estimated at ₹13.1373 crore in FY27, up from ₹10.8430 crore in FY26, while their share of revenue is expected to moderate to 4.16% from 5.15%. Johnsoncab says a substantial number of suppliers are registered under the MSMED Act and it intends to make payments within applicable statutory timelines. This payment approach means revenue must grow faster than payables for the projected ratio decline to occur.

How do Johnsoncab’s working-capital days compare with selected peers?

Johnsoncab’s estimated FY27 net working-capital cycle of 109 days is below the FY26 figures disclosed for Prime Cable Industries Limited at 137 days and JD Cables Ltd. at 201 days, but above Susan Electricals India Ltd at 104 days. The comparison uses the same broad calculation of receivable days plus inventory days less payable days, rather than comparing the companies’ absolute funding requirements.

Johnsoncab’s 16 projected trade-payable days are lower than the selected peers’ FY26 figures of 101 days for Prime Cable Industries Limited, 49 days for JD Cables Ltd. and 28 days for Susan Electricals India Ltd. The gap is 85 days against Prime Cable Industries Limited and 33 days against JD Cables Ltd. Shorter supplier credit reduces the financing contribution from trade payables and increases reliance on Johnsoncab’s own funds, bank facilities and IPO proceeds.

Johnsoncab’s projected 50 receivable days are also below the peer figures, while its 76 inventory days are below Prime Cable Industries Limited’s 98 days and JD Cables Ltd.’s 124 days but above Susan Electricals India Ltd’s 69 days. Prime Cable Industries Limited and JD Cables Ltd.’s FY26 metrics were calculated from audited financial statements, whereas Susan Electricals India Ltd’s figures were disclosed in its prospectus. Johnsoncab’s figures are management estimates for FY27, so the comparison does not establish identical customer terms, supplier profiles or product mixes.

Conclusion

Johnsoncab’s proposed ₹14 crore allocation would cover only a portion of its projected FY27 working-capital gap of ₹98.2263 crore. The estimate is driven by current assets expected to reach ₹116.6686 crore, including ₹60.4358 crore of inventory and ₹48.7018 crore of receivables, while short-term borrowings are projected to remain the largest identified funding source at ₹52.1315 crore.

The next measure to watch is whether Johnsoncab achieves its FY27 revenue estimate of ₹315.7111 crore while maintaining 50 receivable days, 76 inventory days and 16 payable days. That outcome depends on the disclosed capacity-expansion plan, tender activity and order execution, while CARE Ratings Limited will monitor utilisation of the issue proceeds and Johnsoncab has said it will make required fund-use and deviation disclosures.