S. K. Offset’s Revenue Tripled as Working Capital Absorbed Cash

S. K. Offset Limited reported revenue of Rs 66.67 crore and profit after tax of Rs 7.48 crore for the financial year ended March 31, 2026 (FY26), versus Rs 21.53 crore and Rs 0.72 crore in FY24. Yet Rs 20.88 crore was absorbed by inventory and trade receivables, restricting FY26 operating cash inflow to Rs 3.66 crore.

How did S. K. Offset’s revenue and profit change?

S. K. Offset’s revenue tripled between FY24 and FY26, while profit after tax increased more than tenfold. Revenue from operations rose from Rs 21.53 crore in FY24 to Rs 48.20 crore in FY25 and Rs 66.67 crore in FY26. Profit after tax rose from Rs 0.72 crore in FY24 to Rs 1.54 crore in FY25, before reaching Rs 7.48 crore in FY26.

The FY26 profit increase occurred as other income declined rather than expanded. Other income fell from Rs 1.78 crore in FY24 to Rs 0.85 crore in FY25 and Rs 0.22 crore in FY26, while profit before tax increased from Rs 0.99 crore to Rs 2.17 crore and then Rs 9.87 crore. This comparison shows that the reported earnings expansion coincided with higher revenue from operations, not higher other income.

S. K. Offset’s FY26 profit after tax was equivalent to about 11.2% of revenue, compared with about 3.4% in FY24, based on the restated profit-and-loss statement. Basic and diluted earnings per share increased to Rs 13.99 in FY26 from Rs 3.01 in FY25 and Rs 1.42 in FY24. The per-share data and profit figures are reported in the company’s restated financial statements for the three financial years.

What costs accompanied S. K. Offset’s revenue growth?

S. K. Offset’s higher FY26 sales were accompanied by increases in raw-material, employee, finance and depreciation costs. Raw-material consumption rose from Rs 11.27 crore in FY24 to Rs 33.81 crore in FY25 and Rs 40.74 crore in FY26. Employee benefit expense increased from Rs 0.86 crore in FY24 to Rs 4.24 crore in FY25 and Rs 6.08 crore in FY26.

Finance costs increased from Rs 1.93 crore in FY24 to Rs 2.10 crore in FY25 and Rs 2.59 crore in FY26. Depreciation and amortisation rose from Rs 1.01 crore to Rs 1.80 crore and Rs 2.05 crore over the same three years. Finance cost is the interest and related borrowing charge reported in profit and loss, while depreciation and amortisation allocate the cost of assets over their useful lives.

Total expenses increased to Rs 57.13 crore in FY26 from Rs 48.48 crore in FY25 and Rs 22.31 crore in FY24. Other expenses moved differently, falling from Rs 6.23 crore in FY24 to Rs 4.53 crore in FY25 before rising to Rs 5.68 crore in FY26. Total income increased by Rs 18.34 crore in FY26 from FY25, compared with an Rs 8.65 crore increase in total expenses.

Why did S. K. Offset’s working capital absorb cash?

S. K. Offset’s FY26 operating cash flow lagged profit because inventory and customer balances absorbed cash before collection. Working capital is the funding tied up in current operating assets and liabilities, including inventory, trade receivables and trade payables. The cash-flow statement reports Rs 11.74 crore of operating profit before working-capital changes, but only Rs 3.66 crore of net cash generated from operating activities.

Inventory was the largest stated FY26 cash use, at Rs 18.21 crore, and the increase in trade receivables used a further Rs 2.66 crore. Trade receivables are amounts customers owe for goods sold. Together, the two movements used Rs 20.88 crore, exceeding the Rs 11.74 crore operating profit before working-capital changes reported for FY26.

S. K. Offset partly offset this absorption through an Rs 8.99 crore increase in trade payables and other current liabilities, while other current assets released Rs 2.04 crore. Trade payables and other current liabilities are obligations to suppliers and other parties that had not been settled at year-end. After a Rs 0.41 crore cash use from provisions and Rs 0.27 crore of net direct taxes paid, cash generated from operations was Rs 3.94 crore and net operating cash inflow was Rs 3.66 crore.

How did operating cash conversion vary across the three years?

S. K. Offset’s operating cash conversion changed sharply across FY24, FY25 and FY26 despite profit rising each year. Net cash from operating activities was an inflow of Rs 4.40 crore in FY24, an outflow of Rs 10.80 crore in FY25 and an inflow of Rs 3.66 crore in FY26. In the same sequence, profit after tax was Rs 0.72 crore, Rs 1.54 crore and Rs 7.48 crore.

The FY25 operating cash outflow coincided with Rs 23.60 crore used by trade receivables, according to the cash-flow statement. That use outweighed the Rs 1.36 crore cash release from lower inventory and the Rs 6.65 crore increase in trade payables and other current liabilities. In FY24, trade receivables released Rs 6.29 crore of cash, helping generate the Rs 4.40 crore operating inflow even as inventory used Rs 0.65 crore.

S. K. Offset recognises revenue from sales of goods when the significant risks and rewards of ownership pass to the buyer, usually upon delivery, under its stated accounting policy. This means revenue can be recorded before a customer pays the related receivable. Future operating cash conversion will therefore depend on collections from trade receivables, inventory purchases and the timing of supplier and other liability settlements.

How were S. K. Offset’s investment needs funded?

S. K. Offset used Rs 8.07 crore in investing activities in FY26, including Rs 8.44 crore spent on property, plant, equipment and intangible assets. The comparable investing cash outflows were Rs 6.26 crore in FY25 and Rs 6.73 crore in FY24. FY26 fixed-asset purchases exceeded the Rs 3.66 crore operating cash inflow reported for that year.

Long-term borrowings supplied funding during FY26, when S. K. Offset availed Rs 10.54 crore and repaid Rs 2.28 crore. That represents Rs 8.26 crore of net long-term loan proceeds before interest payments. After Rs 2.59 crore of finance costs, Rs 0.93 crore of short-term loan repayments and the other listed financing movements, financing activities produced an Rs 4.74 crore FY26 cash inflow.

S. K. Offset reported long-term borrowings of Rs 19.78 crore and short-term borrowings of Rs 12.82 crore at March 31, 2026, compared with Rs 4.58 crore and Rs 4.56 crore at March 31, 2024. The company also disclosed that it capitalised Rs 74.64 lakh of interest in FY26 on borrowings used to purchase plant and machinery. Under its accounting policy, borrowing costs directly attributable to qualifying assets are included in asset cost rather than charged immediately to profit and loss.

Conclusion

S. K. Offset’s FY24-to-FY26 figures show that substantial earnings growth and cash generation did not move in step. Revenue reached Rs 66.67 crore and profit after tax reached Rs 7.48 crore in FY26, but inventory and trade receivables consumed Rs 20.88 crore of cash, leaving an operating cash inflow of Rs 3.66 crore.

The next financial update should clarify whether trade receivables are collected and inventory converts to cash while asset spending continues. FY26 included Rs 8.44 crore of property, plant, equipment and intangible-asset purchases and Rs 8.26 crore of net long-term loan proceeds before interest, making subsequent operating cash flow, capital expenditure and borrowings relevant disclosed measures to follow.