Maxwell inventory days rose to 71 as cash needs expanded

Maxwell Engineering Solutions Limited’s inventory holding period rose from five days in Fiscal 2024 to 71 days in the period ended July 31, 2026, increasing the cash tied up in operations. Maxwell reported inventories of Rs 7.7417 crore at July 31, 2026 and net working capital of Rs 4.9627 crore, after export growth, a July 2025 factory relocation and higher safety stocks changed its operating cycle.

Why did Maxwell inventory days rise to 71?

Maxwell’s inventory days rose because the company expanded operations and increased stocks of imported inputs and finished goods needed for export deliveries. Inventory holding period, which measures the average time inventory remains held, increased from five days in Fiscal 2024 to 15 days in Fiscal 2025, 47 days in Fiscal 2026 and 71 days in the period ended July 31, 2026.

The increase in days was accompanied by a larger inventory balance. Inventories rose from Rs 25.01 lakh in Fiscal 2024 to Rs 1.5076 crore in Fiscal 2025, Rs 6.1318 crore in Fiscal 2026 and Rs 7.7417 crore at July 31, 2026. Maxwell attributed the movement principally to operating growth, a higher proportion of export sales, and stocks of imported raw materials and finished goods maintained for international shipping lead times.

Maxwell relocated its manufacturing facility to Waghodia Gujarat Industrial Development Corporation in July 2025, which it identified as another cause of higher safety stocks. Safety stock is inventory held as a buffer against supply or delivery interruptions. The additional stock requires funding for as long as Maxwell needs it to sustain manufacturing and fulfil overseas orders within shipping timelines.

How did export dependence affect Maxwell inventory days and cash collection?

Maxwell’s export business extended both the inventory and collection portions of its cash cycle. Revenue from operations outside India accounted for 80.38% in Fiscal 2024, 82.43% in Fiscal 2025, 84.73% in Fiscal 2026 and 84.34% in the period ended July 31, 2026. The company said a substantial majority of customers are outside India and typically receive credit periods of 60 to 90 days.

Trade receivable holding period increased from 26 days in Fiscal 2024 to 34 days in Fiscal 2025, 55 days in Fiscal 2026 and 57 days at July 31, 2026. Trade receivables increased from Rs 1.02 crore in Fiscal 2024 to Rs 5.8692 crore in Fiscal 2026, before declining to Rs 5.2688 crore at July 31, 2026. Longer receivable days mean cash from completed sales remains outstanding for more time.

Imported raw materials added a separate planning requirement. Imported purchases were 64.59% of total raw-material purchases in Fiscal 2024, 65.30% in Fiscal 2025, 62.35% in Fiscal 2026 and 34.03% in the period ended July 31, 2026. Maxwell sourced steel domestically, while carbide and brazing filler were sourced almost entirely internationally, making procurement lead times relevant to inventory levels.

How did Maxwell’s net working capital change across reporting periods?

Maxwell’s net working capital increased sharply from Fiscal 2024 but declined after reaching its highest reported level in Fiscal 2025. Net working capital, defined as total current assets less total current liabilities, was Rs 68.94 lakh in Fiscal 2024, Rs 8.1185 crore in Fiscal 2025, Rs 5.9654 crore in Fiscal 2026 and Rs 4.9627 crore at July 31, 2026.

The change was not caused by inventories alone. Short-term loans and advances rose from Rs 2.6864 crore in Fiscal 2024 to Rs 8.5836 crore in Fiscal 2025, then fell to Rs 2.848 crore in Fiscal 2026 and stood at Rs 3.7101 crore on July 31, 2026. Total current liabilities also rose from Rs 3.5417 crore in Fiscal 2024 to Rs 12.6643 crore at July 31, 2026, partly offsetting the growth in current assets.

Trade payable holding period increased from 49 days in Fiscal 2024 to 66 days in Fiscal 2025, 67 days in Fiscal 2026 and 116 days in the period ended July 31, 2026. Trade payables were Rs 3.0202 crore at July 31, 2026. The reported extension in supplier-payment days reduced the amount of current assets that had to be financed immediately, although total net working capital remained above the Fiscal 2024 level.

Why is the net working-capital-to-revenue ratio not directly comparable?

Maxwell’s net working capital as a percentage of revenue from operations moved from 6.54% in Fiscal 2024 to 36.74% in Fiscal 2025, 20.26% in Fiscal 2026 and 41.79% in the period ended July 31, 2026. The final percentage uses net working capital of Rs 4.9627 crore against revenue from operations of Rs 11.8751 crore for a period ending July 31, 2026, rather than a full financial year.

Revenue from operations rose from Rs 10.5433 crore in Fiscal 2024 to Rs 22.0998 crore in Fiscal 2025 and Rs 29.4483 crore in Fiscal 2026. The 41.79% measure for the partial period should therefore not be treated as directly comparable with the three annual ratios. It nevertheless shows that the reported July 2026 working-capital balance was large relative to revenue booked in that shorter reporting period.

Maxwell said it had not defaulted on any borrowing repayment during the three Fiscal years and had not experienced a working-capital shortfall that delayed customer orders or supplier payments. The company also disclosed delays in payment of certain statutory dues. Its liquidity requirement remains dependent on collection timing, customer credit terms, raw-material prices, lead times and access to financing.

What working-capital funding is Maxwell planning?

Maxwell proposes to use Rs 14 crore of issue proceeds for working-capital requirements, with Rs 11 crore proposed for deployment in Fiscal 2027 and Rs 3 crore in Fiscal 2028. The estimate is based on management assumptions for inventory, receivable and payable holding periods, and an independent chartered accountant certified the estimate.

The estimate was not independently appraised by a bank or financial institution. Maxwell expects working-capital needs to rise as it scales production capacity, begins in-house manufacture of large-format die plates of up to 1.6 metres, maintains higher finished-goods stocks, establishes warehousing and logistics capabilities, offers structured credit to selected customers and expands in the United States, Canada and Mexico.

Maxwell identified delayed customer collections, defaults, changes in credit terms, raw-material price movements, procurement lead times, foreign-exchange movements and unavailable financing as factors that could make actual needs differ from the estimate. Maxwell does not currently use hedging arrangements for foreign-currency exposure on import purchases or export transactions. If requirements exceed estimates, the company said it may need additional debt or equity funding.

Conclusion

Maxwell’s increase from five to 71 inventory days reflects a broader shift in its operating cash cycle. Inventories and receivable days rose as export revenue remained above 80% of revenue from operations, while longer payable days and higher current liabilities partly offset the increase in current assets. Net working capital fell from its Fiscal 2025 peak but remained substantially above the Rs 68.94 lakh reported in Fiscal 2024.

The next measure to watch is Maxwell’s proposed deployment of Rs 14 crore for working capital in Fiscal 2027 and Fiscal 2028. The disclosed plans for larger die plates, higher finished-goods stocks, logistics capabilities and North American expansion, together with actual inventory, receivable and payable holding periods, will determine whether management’s estimate matches its funding requirement.