Liqvd operating cash trailed FY26 profit as receivables grew

Liqvd Digital India Limited generated ₹1.5165 crore of net cash from operating activities in FY26, compared with ₹10.5149 crore of profit before tax. The gap arose after ₹6.0904 crore of higher trade receivables, ₹3.9676 crore of higher other current assets and ₹3.2759 crore of direct tax payments reduced cash flow. Cash and cash equivalents ended FY26 at ₹2.6345 crore.

Why did Liqvd's operating cash trail FY26 profit?

Liqvd's operating cash trailed FY26 profit because working-capital movements and tax payments absorbed most cash generated before those items. Profit before tax was ₹10.5149 crore, while operating profit before working-capital changes was ₹12.5507 crore after adjustments including ₹43.31 lakh of depreciation, ₹49.48 lakh of gratuity expense and ₹1.0934 crore of interest paid. Net cash from operating activities was ₹1.5165 crore after working-capital changes and direct tax paid of ₹3.2759 crore.

The comparison with earlier periods is not like-for-like because FY26 is consolidated, while FY25 and FY24 are standalone. FY26 includes AdLift Marketing Private Limited and AdLift Inc. after the acquisition effective 4 April 2025. On the reported basis, operating cash changed from an outflow of ₹45.95 lakh in FY25 to an inflow of ₹1.5165 crore in FY26, while profit before tax increased from ₹3.21 crore to ₹10.5149 crore.

How did receivables and unbilled revenue affect Liqvd's cash flow?

Liqvd's trade receivables and other current assets together absorbed ₹10.0580 crore of operating cash in FY26. The cash-flow statement records a ₹6.0904 crore increase in trade receivables and a ₹3.9676 crore increase in other current assets. These outflows exceeded the ₹1.7476 crore cash inflow associated with higher trade payables during FY26.

Trade receivables stood at ₹23.8441 crore at 31 March 2026, compared with ₹9.4931 crore at 31 March 2025. The ₹14.3510 crore balance-sheet increase differs from the cash-flow movement because the FY26 figures are consolidated following the AdLift acquisition, whereas the earlier balance is standalone. The FY26 receivable total included ₹2.8488 crore from related parties and ₹20.9953 crore from others, with a ₹6.55 lakh provision for doubtful debts.

Unbilled revenue was ₹5.6521 crore at 31 March 2026, up from ₹2.2650 crore at 31 March 2025, and was the largest component of other current assets of ₹7.3722 crore. Liqvd defines unbilled revenue as services performed but not yet invoiced, recorded as a receivable when it has an unconditional right to payment. Under its fixed-price marketing-service arrangements, cost and earnings in excess of billings are classified as unbilled revenue, while billings exceeding cost and earnings are classified as unearned revenue.

What other items shaped Liqvd's FY26 cash conversion?

Liqvd's ₹3.2759 crore of direct tax paid, together with reductions in some liabilities, also limited FY26 operating cash conversion. Direct tax paid was ₹60.79 lakh in FY25 and ₹2.5533 crore in FY24. Other current liabilities decreased by ₹44.50 lakh and provisions decreased by ₹54.94 lakh in FY26, creating cash outflows that partly offset the increase in trade payables.

Revenue growth provides context for the larger working-capital balances, but does not establish when collections will occur. Revenue from operations rose to ₹60.2391 crore in FY26 from ₹24.8695 crore in FY25, comprising ₹40.5592 crore of domestic service revenue and ₹19.6799 crore of export service revenue. FY25 export service revenue was ₹2.63 lakh, while employee benefit expense increased to ₹23.2407 crore from ₹4.4992 crore and cost of services rose to ₹17.5429 crore from ₹10.8723 crore.

Liqvd recognises revenue from digital marketing, advertising and related services after rendering services, while search engine optimisation and search engine marketing revenue is recognised when services are rendered under contract terms. This policy permits revenue recognition before invoicing and collection where the criteria for unbilled revenue are met. Future operating cash conversion therefore depends on collection of the ₹23.8441 crore receivables balance and billing and collection of the ₹5.6521 crore unbilled-revenue balance without a comparable new build-up in working capital.

Why did Liqvd's cash and cash equivalents fall in FY26?

Liqvd's cash and cash equivalents fell by ₹13.4074 crore in FY26 because investing and financing outflows exceeded the ₹1.5165 crore operating inflow. Net cash used in investing activities was ₹12.6450 crore, including ₹11.2638 crore for the acquisition of a subsidiary net of cash and cash equivalents. The investing total also included ₹1.20 crore of capital advances and ₹24.51 lakh spent on property, plant and equipment and intangible assets.

The acquisition added AdLift Marketing Private Limited and step-down subsidiary AdLift Inc. to the group from 4 April 2025. Liqvd held 76.79% of AdLift Marketing Private Limited and reported goodwill on consolidation of ₹20.0988 crore at 31 March 2026. The cash-flow disclosures also identify a ₹3 crore non-cash share-swap advance for the acquisition through 150,000 equity shares issued at ₹200 each, which was not an investing cash outflow.

Financing activities used ₹2.2789 crore in FY26 after short-term borrowing repayments and ₹1.0934 crore of interest paid. Cash and cash equivalents consequently declined from ₹16.0419 crore at 31 March 2025 to ₹2.6345 crore at 31 March 2026. Fixed deposits fell from ₹15.1388 crore to ₹6.80 lakh, while current-account balances increased from ₹16.29 lakh to ₹2.2880 crore.

Conclusion

Liqvd's FY26 statements show that higher reported profit did not translate proportionately into operating cash. Profit before tax of ₹10.5149 crore produced ₹1.5165 crore of operating cash after receivables, other current assets and tax payments, while investing cash outflows of ₹12.6450 crore further reduced available cash.

The next financial update should show whether the FY26 working-capital build-up reverses through invoicing and collection. The disclosed balances to watch are ₹23.8441 crore of trade receivables and ₹5.6521 crore of unbilled revenue at 31 March 2026, alongside the cash effects of the AdLift acquisition completed from 4 April 2025.