Raksan Receivables Rose 41% as Cash Generation Lagged Profit

Raksan Transformers Limited reported a 41% increase in trade receivables to Rs 73.21 crore for the financial year ended 31 March 2026, or FY26, while profit rose 65% to Rs 33.60 crore. Raksan generated Rs 14.89 crore of operating cash, as the Rs 21.19 crore receivables increase was the largest working-capital cash outflow.

Why did Raksan receivables rise 41% in FY26?

Raksan’s trade receivables increased by Rs 21.19 crore, or 40.7%, from Rs 52.02 crore at 31 March 2025 to Rs 73.21 crore at 31 March 2026. Trade receivables are amounts owed by customers for goods or services already recognised as revenue but not yet collected in cash. The consolidated cash-flow statement records this FY26 increase as a Rs 21.19 crore working-capital outflow.

The receivables increase occurred as revenue from operations rose 12.0% to Rs 363.11 crore in FY26 from Rs 324.21 crore in FY25. Closing receivables equalled 20.2% of FY26 revenue, compared with 16.0% when the FY25 closing receivables balance is measured against FY25 revenue. This is a balance-to-revenue comparison rather than a disclosed collection-days measure, but it shows that unpaid customer balances rose faster than reported sales.

Raksan had also recorded a sharp receivables increase in FY25, when the balance rose Rs 31.90 crore from Rs 20.12 crore at 31 March 2024. The FY26 addition was lower than FY25’s increase in rupee terms, but receivables remained the largest current-asset category at 31 March 2026, ahead of Rs 25.91 crore of inventories and Rs 22.57 lakh of cash and cash equivalents.

How did Raksan’s FY26 cash generation compare with profit?

Raksan’s operating cash generation was Rs 14.89 crore in FY26, equal to 44.3% of its Rs 33.60 crore profit for the year. Profit is reported under accounting rules that recognise income and expenses when earned or incurred, while operating cash flow reflects cash generation after movements in operating assets and liabilities. Customer amounts that remained outstanding at year-end therefore affected the difference between the two measures.

Raksan reported profit before tax of Rs 45.19 crore and operating profit before working-capital changes of Rs 35.31 crore in FY26. Working-capital movements reduced the pre-working-capital amount by Rs 20.42 crore, leaving Rs 14.89 crore of net cash from operating activities. The Rs 21.19 crore receivables increase alone exceeded the final operating-cash figure, although increases in trade payables and other current liabilities partly offset the outflows.

The disclosed statements contain different FY26 depreciation and amortisation figures in the operating-profit and cash-flow presentations. The profit-and-loss statement reports Rs 1.38 crore, while the cash-flow statement includes a Rs 13.78 crore adjustment. Raksan nevertheless reports Rs 14.89 crore of FY26 operating cash flow under the indirect method, which starts with profit before tax and adjusts for non-cash items and working-capital movements.

Which working-capital movements affected Raksan’s operating cash flow?

Raksan’s receivables and inventories were the two largest FY26 working-capital cash uses, at Rs 21.19 crore and Rs 4.67 crore, respectively. Inventories rose from Rs 21.24 crore at 31 March 2025 to Rs 25.91 crore at 31 March 2026. Short-term loans and advances created a further Rs 1.33 crore outflow, while other current assets used Rs 29.46 lakh.

Raksan partly offset these cash uses through higher operating liabilities. Trade payables produced a Rs 1.10 crore inflow, and other current liabilities produced a Rs 6.61 crore inflow, while long-term and short-term provisions used Rs 64.53 lakh. Total trade payables were Rs 43.52 crore at 31 March 2026, including Rs 9.22 crore due to micro and small enterprises and Rs 34.30 crore due to other suppliers.

The composition changed from FY25, when the Rs 31.90 crore receivables increase was partly offset by a Rs 15.74 crore trade-payables inflow. In FY26, the trade-payables inflow fell to Rs 1.10 crore while receivables still consumed Rs 21.19 crore. This lower offset helps explain why FY26 operating cash did not rise in line with the increase in reported profit.

What does Raksan’s year-end balance sheet show about liquidity and funding?

Raksan ended FY26 with Rs 22.57 lakh of cash and cash equivalents, an increase of Rs 1.80 lakh from Rs 20.77 lakh at the end of FY25. The FY26 balance comprised Rs 3.52 lakh in scheduled-bank current accounts, Rs 16.50 lakh of cash in hand and Rs 2.56 lakh of cheques in hand. It remained below the Rs 4.64 crore cash balance reported at 31 March 2024.

The small cash increase followed Rs 11.19 crore of investing cash outflow and Rs 3.68 crore of financing cash outflow in FY26. Investing activities included Rs 7.62 crore spent on property, plant and equipment and intangible assets, plus Rs 3.66 crore of capital work in progress. Property, plant and equipment increased to Rs 40.57 crore at 31 March 2026 from Rs 32.57 crore a year earlier.

Raksan’s long-term borrowings fell to Rs 8.25 crore at 31 March 2026 from Rs 10.14 crore at 31 March 2025, while short-term borrowings declined to Rs 12.49 crore from Rs 13.37 crore. The company repaid Rs 2.32 crore of long-term borrowings and received Rs 31 lakh of long-term borrowing proceeds during FY26; net cash-credit facility proceeds were negative by Rs 76.66 lakh. Raksan also disclosed Rs 46.76 crore of capital commitments not provided for at 31 March 2026, compared with Rs 4.31 crore a year earlier.

How did FY26 compare with Raksan’s previous two years?

Raksan’s operating cash flow improved to Rs 14.89 crore in FY26 from Rs 5.36 crore in FY25, but remained below the Rs 33.60 crore FY26 profit for the year. In FY24, Raksan generated Rs 7.43 crore of operating cash against Rs 7.59 crore of profit. Calculated as operating cash flow divided by profit for the year, the conversion was 97.9% in FY24, 26.3% in FY25 and 44.3% in FY26.

Raksan’s profit for the year rose from Rs 7.59 crore in FY24 to Rs 20.38 crore in FY25 and Rs 33.60 crore in FY26. Revenue from operations increased from Rs 160.95 crore in FY24 to Rs 324.21 crore in FY25 and Rs 363.11 crore in FY26. Over the same three years, trade receivables increased from Rs 20.12 crore to Rs 52.02 crore and then Rs 73.21 crore, increasing the amount tied up in customer balances.

Conclusion

Raksan’s FY26 accounts show that profit growth did not translate fully into operating cash because trade receivables were Rs 21.19 crore higher at year-end than in FY25. Operating cash flow increased by Rs 9.52 crore year on year, but the Rs 73.21 crore receivables balance, Rs 25.91 crore inventory balance and Rs 22.57 lakh cash balance make working-capital conversion central to assessing the FY26 position.

The next disclosed matters to watch are collection of the Rs 73.21 crore FY26 receivables balance and the funding and execution of Rs 46.76 crore of remaining capital contracts. Raksan’s future cash position will also depend on operating cash generation after investment spending, following FY26 investing outflows of Rs 11.19 crore and financing outflows of Rs 3.68 crore.