Shivchem Agro turned cash-positive after two funded expansion years

Shivchem Agro turned cash-positive in FY 2025-26, generating Rs 1.7925 crore from operating activities after using Rs 4.3434 crore in FY 2023-24 and Rs 2.9985 crore in FY 2024-25. The reversal coincided with total borrowings falling by Rs 98.63 lakh from FY 2024-25, chiefly through lower short-term debt.

Why did Shivchem Agro use operating cash during funded expansion?

Shivchem Agro used operating cash in FY 2023-24 and FY 2024-25 because growth in inventory and trade receivables absorbed more cash than operations generated before working-capital changes. Working capital is the funding tied up in short-term assets such as inventory and customer receivables, net of operating liabilities such as supplier payables. In FY 2023-24, profit before tax was Rs 1.7223 crore and operating profit before working-capital changes was Rs 1.9034 crore, but inventory increased by Rs 8.0781 crore and trade receivables by Rs 3.3036 crore.

An increase of Rs 5.0552 crore in trade payables partly funded Shivchem Agro’s FY 2023-24 stock and receivable requirements, but cash used in operating activities was still Rs 4.3434 crore after Rs 6.09 lakh of tax paid. In FY 2024-25, operating cash used narrowed to Rs 2.9985 crore even as inventory increased by Rs 9.2477 crore and trade receivables by Rs 6.8424 crore. Trade payables rose by Rs 9.5954 crore, while tax paid increased to Rs 36.97 lakh.

Shivchem Agro linked its FY 2024-25 inventory build to higher finished-goods holdings at warehouses serving local demand. Purchases rose to Rs 24.4855 crore from Rs 13.7160 crore in FY 2023-24, while closing stock reached Rs 8.3615 crore from Rs 4.0284 crore. The company also reported that production capacity increased 16.21% to 65,07,500 kg/litre in FY 2024-25 from 56,00,000 kg/litre in FY 2023-24.

How did funded expansion affect Shivchem Agro borrowings?

Shivchem Agro increased total borrowings to Rs 8.2615 crore in FY 2024-25 from Rs 7.0982 crore in FY 2023-24 to support working-capital and operational requirements. The company said revenue from operations rose 379.07% to Rs 10.9425 crore in FY 2023-24 from Rs 2.2841 crore in FY 2022-23, leading to higher inventory, receivables and operational capacity. Short-term borrowings increased to Rs 5.5234 crore in FY 2024-25 from Rs 5.3018 crore, while long-term borrowings rose to Rs 2.7381 crore from Rs 1.7964 crore.

Financing activities supplied Rs 5.7154 crore in FY 2023-24 while Shivchem Agro recorded the Rs 4.3434 crore operating outflow. The FY 2023-24 financing inflow included Rs 4.0221 crore of short-term borrowing proceeds and Rs 1.7964 crore of long-term borrowing proceeds, offset in part by Rs 10.29 lakh of interest and finance costs paid. Net cash used in investing activities was Rs 1.3167 crore, principally including Rs 1.3202 crore spent on property, plant and equipment.

In FY 2024-25, financing activities generated Rs 6.0830 crore, including Rs 5.5690 crore from equity-share issuance and Rs 6.2435 crore of long-term borrowing proceeds. Those inflows were partly offset by Rs 5.3018 crore of long-term borrowing repayments and Rs 64.94 lakh of interest and finance costs paid. Shivchem Agro reported capital expenditure of Rs 3.7029 crore in FY 2024-25, compared with Rs 65.94 lakh in FY 2023-24, including Rs 2.2960 crore for plant and machinery and Rs 1.2539 crore for buildings in FY 2024-25.

What changed when Shivchem Agro became cash-positive in FY 2025-26?

Shivchem Agro generated Rs 1.7925 crore from operating activities in FY 2025-26 because operating profit and increases in operating liabilities exceeded further cash absorbed by working capital. Profit before tax increased to Rs 4.3996 crore and operating profit before working-capital changes reached Rs 6.0469 crore. Inventory rose by Rs 1.9275 crore, trade receivables by Rs 5.8201 crore and short-term loans and advances by Rs 2.3419 crore.

The FY 2025-26 working-capital uses were partly offset by a Rs 4.0348 crore increase in trade payables, a Rs 2.0052 crore increase in other liabilities and a Rs 54.46 lakh decrease in other assets. After Rs 74.95 lakh of tax paid, Shivchem Agro reported the Rs 1.7925 crore operating cash surplus. The outcome therefore depended partly on supplier and other operating liabilities rising alongside profit and not solely on lower investment in inventory or receivables.

The positive operating result did not increase year-end cash and cash equivalents. Financing activities used Rs 2.3258 crore in FY 2025-26, including a net repayment of Rs 1.0476 crore in short-term borrowings and Rs 1.3392 crore of interest and finance costs paid. Investing activities generated Rs 42.25 lakh, primarily from a Rs 42.08 lakh sale of property, plant and equipment, and cash equivalents consequently fell to Rs 12.84 lakh at March 31, 2026 from Rs 23.92 lakh at the beginning of the year.

What debt and liquidity obligations remain for Shivchem Agro?

Shivchem Agro’s total borrowings fell to Rs 7.2752 crore in FY 2025-26 from Rs 8.2615 crore in FY 2024-25, but short-term borrowings remained the larger category. Short-term borrowings declined by Rs 1.0473 crore to Rs 4.4761 crore, while long-term borrowings increased by Rs 6.10 lakh to Rs 2.7991 crore. The company attributed the overall reduction mainly to the lower short-term balance.

As of March 31, 2026, Shivchem Agro reported Rs 1.6038 crore of secured long-term bank borrowings and Rs 1.1953 crore of unsecured long-term borrowings. It also reported Rs 1.8952 crore of secured short-term bank borrowings and Rs 2.5809 crore of unsecured short-term borrowings. The four disclosed balances total Rs 7.2752 crore, matching the FY 2025-26 borrowings figure.

Shivchem Agro states that operating cash flow and bank borrowings or credit facilities primarily fund its operations, working-capital needs, capital expenditure and manufacturing-facility expansion. It evaluates funding needs against operating cash flow and market conditions and says it may rely on other debt if operating cash is insufficient, subject to market conditions. The company reported no capital obligations or commitments as of March 31, 2026.

Conclusion

Shivchem Agro’s Rs 1.7925 crore operating cash surplus in FY 2025-26 reversed combined operating cash use of Rs 7.3419 crore over FY 2023-24 and FY 2024-25. The record shows that growth in stock, receivables and capital expenditure coincided with greater financing activity, while higher operating profit and rising payables helped produce the FY 2025-26 surplus. Total borrowings nonetheless ended FY 2025-26 at Rs 7.2752 crore, above the Rs 7.0982 crore reported in FY 2023-24.

The disclosed funding plan makes continued operating cash generation, receivable collections and inventory funding the key items to watch. In FY 2025-26, trade receivables still increased by Rs 5.8201 crore and inventory by Rs 1.9275 crore, while short-term borrowings stood at Rs 4.4761 crore at March 31, 2026. A Rs 1.3556 crore capital advance to Sachin Agarwal for a proposed property acquisition also remained outstanding after March 31, 2026, with the purchase described as in process of completion.