Johnsonsab borrowings were 1.94 times shareholder funds

Johnsonsab Electricals Limited reported Rs 77.57 crore of borrowings at August 31, 2026, equal to 1.94 times its Rs 40.08 crore of shareholders’ funds. Johnsonsab’s Rs 48.12 crore of short-term borrowings was the largest liability category and represented 62% of total borrowings.

Why were Johnsonsab borrowings 1.94 times shareholder funds?

Johnsonsab’s total borrowings were Rs 77.57 crore at August 31, 2026, while total shareholders’ funds were Rs 40.08 crore, resulting in the disclosed total-borrowings-to-shareholders’-funds ratio of 1.94. The pre-issue capitalization statement recorded Rs 7.77 crore of share capital and Rs 32.31 crore of reserves and surplus within shareholders’ funds.

The capitalization statement separates Rs 29.45 crore of long-term borrowings from Rs 48.12 crore of short-term borrowings. Long-term borrowings alone were 0.73 times shareholders’ funds at August 31, 2026. Johnsonsab defines short-term debts as amounts expected to be paid within 12 months, excluding term-loan instalments due within 12 months; those instalments are included within long-term debts under the statement’s definition.

The 1.94 ratio is a balance-sheet measure at August 31, 2026, not a measure of annual interest cost or profit. Borrowings exceeded shareholders’ funds by Rs 37.49 crore on that date. Johnsonsab did not furnish post-issue capitalization figures because the public issue had not been completed, so no post-issue borrowing-to-shareholders’-funds ratio was available.

What made up Johnsonsab’s Rs 77.57 crore borrowings?

Johnsonsab’s borrowing mix was mainly secured, with secured loans of Rs 66.01 crore and unsecured loans of Rs 11.56 crore at August 31, 2026. Secured loans represented 85% of total borrowings, based on the financial indebtedness statement. Total borrowings declined by Rs 2.31 crore from Rs 79.88 crore at March 31, 2026, while unsecured loans increased from Rs 10.77 crore.

The largest disclosed facility was an HDFC Bank cash-credit facility with Rs 48.12 crore outstanding at August 31, 2026 against a Rs 65 crore sanctioned amount. The facility was repayable on demand under the disclosed terms. Its outstanding balance accounted for 62% of Johnsonsab’s Rs 77.57 crore total borrowings, concentrating a majority of debt in one short-term bank facility.

Other disclosed secured facilities comprised three HDFC Bank term loans with balances of Rs 2.75 crore, Rs 2.24 crore and Rs 12.27 crore, alongside an auto premium loan of Rs 62.06 lakh. The term-loan facilities were secured by debtors, fixed deposits for bank guarantees, machinery and stock, with collateral over industrial estates, industrial property and vacant land. The disclosed facilities were also supported by personal guarantees from directors and promoters.

How did working-capital needs affect Johnsonsab borrowings?

Johnsonsab’s funding needs rose as revenue and working capital expanded in fiscal 2026. Revenue from operations increased 50.56% to Rs 210.47 crore in fiscal 2026 from Rs 139.79 crore in fiscal 2025. Inventory increased by Rs 26.54 crore and trade receivables increased by Rs 16.03 crore during fiscal 2026, according to the cash-flow explanation.

These working-capital movements coincided with net cash used in operating activities of Rs 19.70 crore in fiscal 2026, despite profit before tax of Rs 17.94 crore. Johnsonsab reported operating profit before working-capital adjustments of Rs 25.31 crore, but the increase in inventory and receivables resulted in cash generated from operations of Rs 15.18 crore used before income-tax payments of Rs 4.52 crore.

The pattern was also reported in fiscal 2025 at a smaller scale. Revenue rose 58.24% to Rs 139.79 crore in fiscal 2025 from Rs 88.34 crore in fiscal 2024, while trade receivables increased by Rs 9.72 crore and inventory increased by Rs 4.04 crore. Net operating cash flow was Rs 1.73 crore used in fiscal 2025, and short-term borrowings rose 61.47% to Rs 22.23 crore at March 31, 2025 from Rs 13.77 crore a year earlier.

Johnsonsab reported operating cash inflow of Rs 7.65 crore for the period ended August 31, 2026, compared with profit before tax of Rs 11.55 crore. Realisation of Rs 10.55 crore from trade receivables was partly offset by Rs 14.31 crore used for higher inventories and a Rs 3.42 crore decrease in trade payables and other current liabilities. Future use of working-capital facilities depends on the timing of receivable collections, inventory movements and current-liability changes.

Did fresh shares change Johnsonsab’s financing cash flows?

Fresh shares provided Rs 37.80 crore of financing cash inflow in fiscal 2026, while net cash generated from financing activities was Rs 36.65 crore. The financing cash-flow statement also reported Rs 5.05 crore from short-term and long-term borrowings, offset by Rs 12.32 crore of long-term borrowing repayments and Rs 5.21 crore of interest costs.

The fiscal 2026 equity proceeds coincided with working-capital deployment and capital expenditure, rather than resulting in the elimination of borrowings by August 31, 2026. Johnsonsab spent Rs 16.29 crore on property, plant and equipment and Rs 2.50 crore on capital work-in-progress, described as construction of a factory shed at Unit-II. Net cash used in investing activities was Rs 16.69 crore in fiscal 2026.

Financing cash inflows were also reported before fiscal 2026, at Rs 5.16 crore in fiscal 2025 and Rs 14.13 crore in fiscal 2024. Johnsonsab stated that it had previously met additional short-term working-capital requirements through bank working-capital facilities, while promoters provided unsecured loans for cash-flow shortfalls. Promoter unsecured loans were Rs 7.49 crore at March 31, 2026, down from Rs 10.91 crore at March 31, 2025.

What does Johnsonsab’s borrowing structure show before the issue?

Johnsonsab’s pre-issue position combined Rs 77.57 crore of borrowings with operating cash outflows in fiscal 2025 and fiscal 2026 caused by higher working-capital requirements. The Rs 48.12 crore cash-credit balance was repayable on demand and formed 62% of total borrowings. The disclosed security for bank term loans included debtors, stock, machinery, fixed deposits for bank guarantees and specified immovable properties.

The comparison between March 31, 2026 and August 31, 2026 shows total borrowings fell by Rs 2.31 crore, from Rs 79.88 crore to Rs 77.57 crore. Secured loans declined by Rs 3.10 crore from Rs 69.11 crore, while unsecured loans rose by Rs 78.98 lakh from Rs 10.77 crore. The post-issue balance-sheet effect remains unresolved because Johnsonsab stated that post-issue capitalization figures were not determinable before completion of the public issue.

Conclusion

Johnsonsab’s capitalization statement shows that borrowings of Rs 77.57 crore were 1.94 times shareholders’ funds of Rs 40.08 crore at August 31, 2026. The debt balance was led by Rs 48.12 crore of short-term borrowings, while fiscal 2026 revenue growth of 50.56% coincided with cash deployment into inventory, receivables and capital expenditure.

The next disclosed measure to watch is Johnsonsab’s post-issue capitalization, because the company did not provide post-issue borrowings, shareholders’ funds or leverage ratios pending completion of the public issue. The balance outstanding under the Rs 65 crore HDFC Bank cash-credit facility, together with inventory and trade-receivable movements, will show whether the Rs 2.31 crore decline in total borrowings through August 31, 2026 continues.