Nityas Profit Rose as Operating Cash Outflows Persisted

Nityas Gems and Jewellery Limited reported profit after tax of Rs 22.315 crore for the year ended March 31, 2026, but used Rs 14.732 crore in operating activities. The gap arose principally from Rs 21.476 crore absorbed by inventory and Rs 11.865 crore by trade receivables, extending three consecutive years of negative operating cash flow.

Why did Nityas report profit while operating cash flow was negative?

Nityas generated Rs 32.007 crore of operating profit before working-capital changes in the year ended March 31, 2026, but cash used in operations reached Rs 10.308 crore before tax payments. Working capital is funding tied up in short-term operating assets and liabilities, including inventory, customer receivables and supplier payables. After Rs 4.424 crore of income taxes paid, net operating cash outflow was Rs 14.732 crore under the indirect method prescribed by Indian Accounting Standard 7, or Ind AS 7.

The difference between accounting profit and cash widened as reported income increased. Profit after tax rose from Rs 4.024 crore in the year ended March 31, 2024, to Rs 9.788 crore in 2025 and Rs 22.315 crore in 2026. Revenue from operations increased from Rs 53.655 crore in 2024 to Rs 96.845 crore in 2025 and Rs 202.894 crore in 2026, while operating cash flow remained negative in every reported year.

The cash-flow comparison shows that Nityas's operating expansion did not produce positive operating cash after movements in operating assets, liabilities and taxes. Depreciation and amortisation of Rs 2.587 crore and finance cost of Rs 1.461 crore were added back in the 2026 indirect cash-flow calculation, but those adjustments were outweighed by working-capital cash use.

Which working-capital items drove Nityas's operating cash outflow?

Nityas's largest 2026 operating cash use was the Rs 21.476 crore increase in inventories, followed by the Rs 11.865 crore increase in trade receivables. Trade receivables are amounts due from customers for goods already sold. Other assets consumed Rs 2.031 crore, while trade payables decreased by Rs 4.613 crore, reducing the cash funding available from supplier obligations.

The same core items absorbed cash in the two earlier years. Inventory consumed Rs 20.950 crore in the year ended March 31, 2025 and Rs 1.453 crore in 2024, while receivables consumed Rs 6.544 crore in 2025 and Rs 3.405 crore in 2024. In 2026, the combined Rs 33.341 crore inventory and receivables cash use exceeded inflows including Rs 2.397 crore from other liabilities and Rs 0.441 crore from other financial liabilities.

The persistence of operating cash outflows depends on whether further revenue growth requires similarly large additions to stock and customer credit. Lower inventory investment, faster customer collections or greater supplier financing would alter cash conversion, but the restated consolidated financial information does not disclose a working-capital target, collection plan or inventory-reduction plan.

How much capital was tied up in inventory and receivables?

Nityas carried Rs 63.592 crore of inventory and Rs 21.458 crore of trade receivables at March 31, 2026. The combined Rs 85.050 crore represented about 73% of total assets of Rs 116.415 crore and about 96% of current assets of Rs 88.947 crore. These two asset classes were therefore the largest disclosed components of the March 2026 balance sheet.

Inventory rose from Rs 5.269 crore at March 31, 2024 to Rs 26.218 crore at March 31, 2025 and Rs 63.592 crore at March 31, 2026. Trade receivables increased from Rs 4.064 crore to Rs 10.610 crore and then Rs 21.458 crore across the same dates. The balance-sheet movement was accompanied by revenue growth to Rs 202.894 crore in 2026 from Rs 53.655 crore in 2024, but eventual stock sales and customer collections remain necessary for these assets to become cash.

Cash and cash equivalents were Rs 0.542 crore at March 31, 2026, compared with Rs 0.297 crore at March 31, 2025. Nityas also reported Rs 8.987 crore of current borrowings and Rs 8.392 crore of trade payables at March 31, 2026. The statements do not provide inventory-ageing or receivable-ageing information, so they do not establish the timing of stock conversion or customer collections.

How was Nityas funded while operations used cash?

Nityas recorded Rs 16.858 crore of net financing cash inflow in the year ended March 31, 2026, exceeding its Rs 14.732 crore operating cash outflow and Rs 1.993 crore investing cash outflow. Financing cash included Rs 18.735 crore of proceeds from share capital and share premium and Rs 2.648 crore of net short-term borrowing proceeds. Cash and cash equivalents increased by Rs 0.133 crore before a Rs 0.113 crore addition on acquisition of a subsidiary.

The financing mix changed alongside the working-capital build-up. Equity attributable to owners increased to Rs 62.438 crore at March 31, 2026 from Rs 21.351 crore at March 31, 2025, while current borrowings rose to Rs 8.987 crore from Rs 6.339 crore. Net financing cash inflow was Rs 10.715 crore in 2025, when Nityas used Rs 10.052 crore in operating activities, showing that financing inflows exceeded the operating cash deficit in both 2025 and 2026.

Nityas spent Rs 1.848 crore on property, plant and equipment and capital work-in-progress in 2026, with total investing cash use of Rs 1.993 crore. Lease liabilities closed at Rs 14.345 crore at March 31, 2026, after Rs 10.913 crore of additions on acquisition of a subsidiary, Rs 5.989 crore of new lease recognition and Rs 1.925 crore of repayments. These lease movements include non-cash changes and are distinct from the operating cash outflow.

Conclusion

Nityas's reported earnings and operating cash moved in opposite directions over the three years ended March 31, 2026. Profit after tax increased from Rs 4.024 crore in 2024 to Rs 22.315 crore in 2026, while operating cash outflow increased from Rs 1.051 crore to Rs 14.732 crore. The cash-flow statement identifies inventory and trade receivables, rather than depreciation, finance cost or capital expenditure, as the main causes of the gap.

The next financial statements will show whether the Rs 85.050 crore held in inventory and receivables at March 31, 2026 converts into customer collections and operating cash. Nityas's restated consolidated financial information was prepared for its proposed initial public offer and applied Ind AS following an April 1, 2023 transition date, but it does not disclose a future working-capital or collection target.