The Company’s FY26 operating cash flow fell amid asset build-up

The Company generated positive operating cash flow of ₹27.15 crore in Fiscal 2026, but this was 28.92% below ₹38.20 crore in Fiscal 2025. Trade receivables, other current assets and other current financial assets absorbed ₹26.94 crore, limiting conversion of ₹53.35 crore generated before working-capital changes.

Why did The Company’s FY26 operating cash flow fall?

The Company’s operating cash flow fell because larger working-capital uses and tax payments outweighed higher cash generation before working-capital changes. Net cash from operating activities was ₹27.15 crore in Fiscal 2026, compared with ₹38.20 crore in Fiscal 2025 and ₹27.73 crore in Fiscal 2024. Operating cash flow was positive in each of the three reported fiscal years.

The Company generated ₹53.35 crore before working-capital changes in Fiscal 2026, up from ₹47.88 crore in Fiscal 2025. Restated profit before tax increased 7.32% to ₹33.78 crore from ₹31.48 crore, while depreciation of ₹7.77 crore and finance cost of ₹15.04 crore were added in the reconciliation. Interest income on bank deposits and loans to associate concerns of ₹7.79 crore reduced the pre-working-capital figure.

How much cash did receivables and other current assets absorb?

The Company’s trade receivables, other current assets and other current financial assets absorbed ₹26.94 crore in Fiscal 2026. Trade receivables increased by ₹16.23 crore, other current assets increased by ₹8.77 crore and other current financial assets increased by ₹1.94 crore. An increase in these balances uses cash because funds are tied up in customer dues or current assets rather than available as cash.

The Company also recorded a ₹2.47 crore increase in current inventories and a ₹53.41 lakh increase in other non-current financial assets. The five disclosed asset-side movements therefore used ₹29.95 crore. Those uses were partly offset by increases of ₹6.09 crore in trade payables, ₹4.51 crore in other current liabilities and ₹89.45 lakh in current and non-current financial liabilities.

The Company’s disclosed movements produced a net working-capital cash outflow of ₹18.45 crore in Fiscal 2026. Income taxes paid added a further ₹7.75 crore cash outflow, reconciling operating cash flow before working-capital changes of ₹53.35 crore to reported net operating cash flow of ₹27.15 crore. Continued operating cash conversion will depend on receivable collections, inventory movements and payment timing to suppliers and other counterparties.

What changed from Fiscal 2025 in working capital?

The Company’s working-capital movement shifted to a ₹18.45 crore net cash outflow in Fiscal 2026 after a smaller outflow in Fiscal 2025. In Fiscal 2025, current inventories rose by ₹28.66 crore and trade receivables rose by ₹9.63 crore. These asset-side uses were substantially offset by a ₹16.65 crore increase in trade payables, a ₹14.32 crore increase in other current liabilities and a ₹2.47 crore decrease in other current assets.

The Company paid ₹7.75 crore of income taxes in Fiscal 2026, compared with ₹3.52 crore in Fiscal 2025. Although Fiscal 2026 profit before tax was ₹2.30 crore higher than in Fiscal 2025, the larger working-capital outflow and higher tax payment reduced net operating cash flow by ₹11.05 crore. This comparison shows that the increase in reported profit did not result in a matching increase in operating cash flow.

Fiscal 2024 had the opposite receivables pattern. The Company reported a ₹11.06 crore decrease in trade receivables and a ₹1.62 crore decrease in other current assets, both of which released cash, while inventories increased by ₹8.26 crore. Net operating cash flow was ₹27.73 crore in Fiscal 2024, above the ₹23.57 crore generated before working-capital changes, despite restated profit before tax of ₹4.58 crore.

What does the receivables increase mean for credit exposure?

The Company’s trade receivables were ₹63.38 crore as at March 31, 2026, and the Company identified them as its primary maximum exposure to credit risk at that date. The ₹16.23 crore Fiscal 2026 increase equalled 25.61% of the March 31, 2026 receivables balance. The Company states that these receivables are typically unsecured and arise from customers in India.

The Company provides loss allowance for trade receivables using the expected credit loss, or ECL, model under a simplified approach. It performs an individual-customer impairment analysis at each reporting date, considering financial condition, economic trends, historical bad debts and receivable ageing. Collection performance and customer credit quality will therefore affect whether the higher receivables balance becomes operating cash.

The Company also states that a significant portion of revenue is derived from its top 10 customers, although the supplied disclosure does not quantify that revenue share. The stated maximum credit exposure equals the carrying value of financial assets. The Company’s management of counterparty credit risk is intended to prevent losses in those financial assets.

How did investing and financing cash flows affect liquidity?

The Company’s positive operating cash flow did not prevent a ₹5.54 crore net decrease in cash and cash equivalents during Fiscal 2026 because investing and financing activities used ₹32.70 crore combined. Net cash used in investing activities was ₹10.64 crore and net cash used in financing activities was ₹22.06 crore. Fiscal 2025 instead recorded a ₹4.92 crore net increase in cash and cash equivalents.

The Company spent ₹35.29 crore on property, plant and equipment in Fiscal 2026, partly offset by ₹11.70 crore from sale of property, plant and equipment and ₹10.97 crore from a decrease in loans given to related parties. Financing cash uses included ₹15.09 crore of interest paid on borrowings and trade payables, ₹5.53 crore of non-current borrowing repayments, ₹61.47 lakh of current borrowing repayments and ₹81.95 lakh of lease-liability payments.

The Company reported ₹16.55 lakh of cash and cash equivalents, ₹7.58 crore of bank balances other than cash equivalents, ₹38.31 crore of non-current borrowings and ₹49.10 crore of current borrowings as at March 31, 2026. The Company states that it has historically financed expansion through debt and operating funds, while obtaining loan facilities from time to time for short-term working-capital requirements. Total outstanding borrowings were ₹119.35 crore as at June 30, 2026.

Conclusion

The Company’s Fiscal 2026 cash-flow outcome shows that positive operations did not fully translate into higher reported operating cash flow. Cash generation before working-capital changes increased to ₹53.35 crore, but receivables, other current assets and other current financial assets absorbed ₹26.94 crore, while total disclosed working-capital movements and tax payments reduced net operating cash flow to ₹27.15 crore.

The next results will show whether the ₹63.38 crore receivables balance is collected and whether inventory and other current-asset movements moderate. The Company has disclosed that it evaluates funding needs regularly and that financing agreements contain covenants and, in some cases, lender-consent requirements for specified activities and transactions.