Runwal funded three years of operating outflows with debt

Runwal funded three consecutive years of operating cash outflows through financing inflows while reporting profit in each year. Net cash used in operating activities was Rs 180.713 crore in Fiscal 2026, while financing activities generated Rs 496.010 crore and outstanding borrowings stood at Rs 2,909.128 crore on March 31, 2026.

Why did Runwal report operating cash outflows despite profits?

Runwal reported profit but negative operating cash flow because cash was deployed into project inventories and working-capital balances before related revenue was recognised. Fiscal 2026 profit before tax was Rs 223.930 crore, yet net cash used in operating activities was Rs 180.713 crore after an inventory increase of Rs 1,397.170 crore and income-tax payments of Rs 79.617 crore.

Runwal recognises revenue from residential and commercial unit contracts at a point in time, when control passes to the customer and is linked to an occupation certificate and possession letter. Direct real-estate development expenditure, including attributable finance cost, is carried as inventory until related revenue is recognised. Inventory includes unsold completed premises, construction work-in-progress and unused land held for development.

Operating cash use declined from Rs 549.482 crore in Fiscal 2024 to Rs 198.136 crore in Fiscal 2025 and Rs 180.713 crore in Fiscal 2026, but remained negative throughout the three-year period. Inventory additions also declined from Rs 1,863.683 crore in Fiscal 2024 to Rs 656.780 crore in Fiscal 2025 before rising to Rs 1,397.170 crore in Fiscal 2026.

How did inventory growth drive Runwal's operating cash outflows?

Runwal's inventory build-up was the principal identified working-capital factor behind the three operating cash outflows. In Fiscal 2026, the Rs 1,397.170 crore inventory increase exceeded profit before tax of Rs 223.930 crore. In Fiscal 2025, inventory increased by Rs 656.780 crore against profit before tax of Rs 97.560 crore, while Fiscal 2024 inventory growth was Rs 1,863.683 crore against Rs 156.773 crore of profit before tax.

Closing construction work-in-progress rose from Rs 5,315.687 crore in Fiscal 2024 to Rs 6,135.785 crore in Fiscal 2025 and Rs 7,731.895 crore in Fiscal 2026. Work-in-progress includes land cost, development-right premiums, transferable development rights, construction costs, allocated interest and project-related incidental expenses. Fiscal 2026 finished-goods inventory fell to Rs 374.316 crore from Rs 439.706 crore in Fiscal 2025, partly offsetting the work-in-progress increase.

Other current liabilities increased by Rs 836.389 crore in Fiscal 2026, Rs 559.958 crore in Fiscal 2025 and Rs 1,106.524 crore in Fiscal 2024. Trade payables increased by Rs 33.792 crore, Rs 28.665 crore and Rs 195.207 crore, respectively. These liability movements partly offset cash absorbed by inventory but did not produce positive operating cash flow in any reported year.

How much did borrowings finance Runwal's funding needs?

Runwal's financing activities generated Rs 496.010 crore in Fiscal 2026, Rs 309.763 crore in Fiscal 2025 and Rs 351.810 crore in Fiscal 2024, with current and non-current borrowings identified as primary liquidity sources. The stated sources include term loans and proceeds from non-convertible debentures, alongside cash generated from operating activities.

In Fiscal 2026, Runwal received Rs 1,683.933 crore from non-current borrowings and Rs 486.248 crore from current borrowings. It repaid Rs 1,815.610 crore of non-current borrowings and Rs 118.021 crore of current borrowings, and paid Rs 272.900 crore of interest. The resulting Rs 496.010 crore financing inflow reflects both new borrowing and substantial repayments during the year.

Fiscal 2025 included Rs 1,510.749 crore of non-current borrowing proceeds and Rs 706.067 crore of current borrowing proceeds, against repayments of Rs 1,107.471 crore and Rs 580.417 crore, respectively. Fiscal 2024 included Rs 596.156 crore of non-current and Rs 282.443 crore of current borrowing proceeds, while repayments totalled Rs 323.212 crore and interest payments were Rs 203.577 crore.

As of March 31, 2026, Runwal had outstanding current and non-current borrowings of Rs 2,909.128 crore, mainly comprising secured term and car loans from banks and unsecured non-convertible redeemable preference shares. Net debt was Rs 2,778.110 crore, defined as non-current borrowings, current borrowings and interest payable less cash and cash equivalents. Cash and cash equivalents were Rs 201.264 crore on that date.

What changed in Runwal's liquidity during Fiscal 2026?

Runwal ended Fiscal 2026 with Rs 201.264 crore of cash and cash equivalents, up Rs 102.072 crore from Rs 99.192 crore at the start of the year. The increase occurred because the Rs 496.010 crore financing inflow exceeded the combined Rs 180.713 crore operating outflow and Rs 213.231 crore investing outflow.

Fiscal 2026 investing cash use was primarily attributable to Rs 231.621 crore spent on property, plant, equipment and intangible assets and Rs 31.567 crore invested in inter-corporate deposits. This differed from Fiscal 2024, when investing activities generated Rs 251.486 crore, mainly due to Rs 345.125 crore of proceeds from inter-corporate deposits.

Reported profitability increased in Fiscal 2026 even though operating cash flow remained negative. Total income rose 76.15% to Rs 1,850.793 crore from Rs 1,050.714 crore in Fiscal 2025, while net profit rose to Rs 185.763 crore from Rs 55.648 crore. Revenue from operations increased 78.51% to Rs 1,798.949 crore, primarily due to higher revenue recognition from residential and retail projects.

Runwal disclosed capital commitments of Rs 199.870 crore at March 31, 2026, compared with Rs 196.195 crore a year earlier. The company expects cash flow from operating activities, borrowings and net proceeds of the issue to address capital requirements for the next 12 months. Its funding requirements are evaluated periodically against operating cash flow, business needs, acquisition opportunities and market conditions.

Conclusion

Runwal's Fiscal 2024 to Fiscal 2026 results show that accounting profit did not translate into operating cash generation as project inventories expanded. Operating cash use narrowed from Rs 549.482 crore in Fiscal 2024 to Rs 180.713 crore in Fiscal 2026, while financing inflows and borrowing proceeds supplied liquidity and reported borrowings reached Rs 2,909.128 crore at March 31, 2026.

The disclosed plan depends on operating cash flow, borrowings and net proceeds of the issue meeting capital requirements over the next 12 months. The next measure to watch is whether project completion, possession-linked revenue recognition and customer collections reduce inventory-funded working-capital needs enough to move operating cash flow into positive territory.