Karamtara’s FY26 capex outpaced cash flow as debt rose 85%

Karamtara’s FY26 capital expenditure, or capex, outpaced operating cash flow: net purchases of operating and development assets were Rs 925.664 crore, against Rs 675.148 crore of net cash from operations. Total borrowings increased 85% to Rs 1,030.129 crore at March 31, 2026, while trade and other liabilities also increased.

Why did Karamtara’s FY26 capex exceed operating cash flow?

Karamtara spent Rs 959.462 crore on net investing activities in FY26, exceeding its Rs 675.148 crore operating cash flow by Rs 284.314 crore before financing cash flows. Net investing cash used rose from Rs 276.421 crore in FY25, while operating cash flow increased from Rs 102.515 crore. Net purchases of property, plant and equipment, capital work in progress and intangible assets accounted for Rs 925.664 crore of the FY26 investing outflow.

Property, plant and equipment, or PPE, represents physical operating assets, while capital work in progress represents assets under construction or not yet ready for use. PPE rose to Rs 1,164.270 crore at March 31, 2026 from Rs 641.821 crore a year earlier, and capital work in progress increased to Rs 484.586 crore from Rs 194.245 crore. The cash-flow purchase line includes intangible assets, so it does not directly match the movement in year-end asset balances.

How was Karamtara’s FY26 expansion financed?

Karamtara reported Rs 328.335 crore of net cash from financing activities in FY26, helping fund the difference between operating inflows and investing outflows. Proceeds from other-than-short-term borrowings were Rs 455.215 crore, compared with Rs 136.163 crore in FY25, while net secured borrowings increased by Rs 87.500 crore. Repayments of other-than-short-term borrowings were Rs 56.024 crore and interest and bank charges paid were Rs 141.043 crore.

Total borrowings, combining current and non-current borrowings, increased by Rs 473.853 crore to Rs 1,030.129 crore at March 31, 2026 from Rs 556.276 crore at March 31, 2025. Non-current borrowings rose to Rs 566.650 crore from Rs 218.201 crore, while current borrowings increased to Rs 463.479 crore from Rs 338.075 crore. The 85% increase coincided with the expansion of PPE and capital work in progress.

The cash-flow statement records no proceeds from issue of equity shares in FY26, after Rs 314.270 crore in FY25. Total equity nevertheless increased to Rs 1,219.917 crore at March 31, 2026 from Rs 983.186 crore, including other equity of Rs 927.622 crore versus Rs 690.891 crore. A closing equity balance is distinct from cash raised during a year, and the FY26 cash-flow statement identifies borrowings rather than equity issuance as the reported financing inflow.

What did Karamtara’s operating cash flow depend on?

Karamtara’s Rs 675.148 crore FY26 operating cash flow reflected working-capital movements as well as Rs 228.754 crore of profit after tax. Operating profit before working-capital changes was Rs 507.427 crore, including Rs 144.023 crore of interest and bank charges and Rs 50.759 crore of depreciation and amortisation added back. Cash generated from operations reached Rs 757.607 crore before Rs 82.459 crore of direct tax payments.

Trade receivables consumed Rs 381.472 crore of operating cash in FY26, compared with Rs 366.109 crore in FY25. Trade receivables increased to Rs 1,316.095 crore at March 31, 2026 from Rs 934.623 crore, while revenue from operations rose to Rs 4,311.976 crore from Rs 3,158.445 crore. Cash generation at the FY26 level would therefore depend partly on the collection of customer balances as revenue expands.

Inventories generated Rs 119.751 crore of cash in FY26 because inventories fell to Rs 571.818 crore from Rs 691.569 crore. In FY25, inventory consumed Rs 162.984 crore of cash. The reversal in the inventory movement supported the year-on-year increase of Rs 572.633 crore in operating cash flow, but further inventory reductions would not be available indefinitely as a source of cash.

Which liabilities supported Karamtara’s FY26 cash position?

Karamtara’s operating cash generation included Rs 289.527 crore from higher trade payables and Rs 299.758 crore from higher financial and other liabilities. Trade payables other than dues to micro and small enterprises increased to Rs 1,299.639 crore at March 31, 2026 from Rs 1,022.001 crore. The cash-flow contribution differs from the balance-sheet change because the cash-flow statement groups operating liabilities into specified categories.

Other non-current liabilities increased from nil at March 31, 2025 to Rs 177.136 crore at March 31, 2026 and provided Rs 166.309 crore in the operating-liability adjustment. Other current liabilities rose to Rs 196.752 crore from Rs 98.942 crore, while other current financial liabilities increased to Rs 51.142 crore from Rs 23.209 crore. These liability increases can support cash in a reporting period because payments may occur after expenses or purchases are recognised, but they also leave obligations outstanding at year end.

Lease liabilities also increased alongside the asset programme. Non-current lease liabilities were Rs 62.758 crore at March 31, 2026, compared with Rs 1.348 crore a year earlier, and current lease liabilities rose to Rs 11.946 crore from Rs 1.260 crore. Cash and cash equivalents ended FY26 at Rs 74.850 crore, up from Rs 30.829 crore, following the combined effects of operating, investing and financing cash flows.

How did earnings growth compare with Karamtara’s balance-sheet expansion?

Karamtara’s revenue and profit increased in FY26, but total assets grew by more in absolute terms than profit after tax. Revenue from operations increased by Rs 1,153.531 crore, or about 37%, to Rs 4,311.976 crore, while profit after tax rose by Rs 89.422 crore to Rs 228.754 crore. Total assets increased by Rs 1,379.650 crore to Rs 4,142.237 crore, led by a Rs 957.124 crore increase in non-current assets.

Finance cost rose to Rs 140.520 crore in FY26 from Rs 127.772 crore in FY25, while profit before tax increased to Rs 311.212 crore from Rs 188.271 crore. The financial summary does not allocate finance cost among individual borrowing facilities or state their interest rates. The continuing cash implications of the expansion will depend on operating cash generation, the completion and use of capital work in progress, debt servicing and settlement of working-capital liabilities.

Conclusion

Karamtara’s FY26 financial statements show that Rs 925.664 crore of capital expenditure and Rs 959.462 crore of net investing cash outflow exceeded Rs 675.148 crore of operating cash flow. Revenue and profit after tax increased, but funding also included Rs 328.335 crore of net financing inflow, an 85% increase in borrowings and higher trade and other liabilities.

The next financial update can be assessed against the March 31, 2026 position, including Rs 484.586 crore of capital work in progress, Rs 1,030.129 crore of total borrowings and Rs 1,316.095 crore of trade receivables. Subsequent statements may show whether capital work in progress is transferred into PPE, whether receivables are converted into cash and how the enlarged liability base is settled.