The Company’s Operating Cash Outflow Widened to ₹46.851 Crore

The Company’s operating cash outflow widened to ₹46.851 crore in Fiscal 2026 from ₹8.9436 crore in Fiscal 2025, despite ₹40.318 crore of operating profit before working-capital changes. Working capital, meaning current operating assets and liabilities, absorbed cash as trade receivables, inventories and short-term loans and advances increased.

Why did The Company’s operating cash outflow widen in FY26?

The Company’s operating cash outflow widened because the Fiscal 2026 increase in operating assets exceeded operating profit and the cash benefit from higher liabilities. Net cash used in operating activities was ₹46.851 crore in Fiscal 2026, compared with ₹8.9436 crore in Fiscal 2025 and net cash generated of ₹17.32 lakh in Fiscal 2024. The comparison shows two consecutive years in which reported operating profit before working-capital changes did not become positive operating cash flow.

Trade receivables were the largest Fiscal 2026 cash use, increasing by ₹46.9335 crore, followed by inventories at ₹28.3417 crore and short-term loans and advances at ₹23.4152 crore. Other current assets increased by ₹2.8348 crore. These movements were partly offset by a ₹17.8078 crore rise in trade payables, a ₹5.6885 crore increase in current liabilities and a ₹47.51 lakh increase in provisions, but the stated result remained a ₹46.851 crore operating cash outflow.

The Company’s cash result depends on the timing of billing, collections, materials procurement and payments to suppliers. An increase in receivables represents cash not yet collected from customers, while an inventory increase represents funds committed to materials. For operating cash flow to turn positive while activity expands, collections and inventory deployment would need to offset further additions to those balances.

How did working-capital absorption change from Fiscal 2025 to Fiscal 2026?

The Company’s working-capital absorption increased across receivables, inventories and advances in Fiscal 2026. Operating profit before changes in working capital rose to ₹40.318 crore in Fiscal 2026 from ₹16.4239 crore in Fiscal 2025, but the operating cash deficit widened by ₹37.9074 crore. Fiscal 2025 had also recorded an operating cash outflow after a smaller, but still material, build-up in current operating assets.

Trade receivables increased by ₹22.6172 crore in Fiscal 2025 and by ₹46.9335 crore in Fiscal 2026. Inventories increased by ₹6.6178 crore in Fiscal 2025 before rising by ₹28.3417 crore in Fiscal 2026, while short-term loans and advances rose by ₹9.8809 crore and ₹23.4152 crore, respectively. The larger Fiscal 2026 increases explain why the higher pre-working-capital operating profit was insufficient to produce an operating cash inflow.

The balance-sheet figures show that the cash requirements continued after year-end. Trade receivables increased from ₹26.3267 crore at March 31, 2025 to ₹73.2602 crore at March 31, 2026, then to ₹100.5649 crore at June 30, 2026. Inventories rose from ₹9.0864 crore at March 31, 2025 to ₹37.4281 crore at March 31, 2026 and ₹52.816 crore at June 30, 2026, making collection and inventory movement material to future cash conversion.

What funded The Company while operating cash stayed negative?

The Company funded the Fiscal 2026 operating cash requirement principally through equity issuance and financing inflows. Net cash generated from financing activities was ₹51.7697 crore in Fiscal 2026, exceeding the ₹46.851 crore operating outflow and the ₹40.20 lakh investing outflow. Cash and cash equivalents therefore increased from ₹63.66 lakh at March 31, 2025 to ₹5.1534 crore at March 31, 2026.

The largest identified Fiscal 2026 financing source was ₹56.3856 crore from the issue of shares. The Company reported repayments of ₹3.5498 crore of short-term borrowings and ₹34.79 lakh of long-term borrowings, alongside ₹71.82 lakh of finance costs. Shareholders’ funds rose from ₹15.1312 crore at March 31, 2025 to ₹99.5584 crore at March 31, 2026; the Company attributed the change to ₹28.0416 crore of profit and the share issue.

Financing in Fiscal 2025 had a different composition, with ₹19.9166 crore of short-term borrowing proceeds as the main stated source of a ₹19.2382 crore financing inflow. That year, operating activities used ₹8.9436 crore and investing activities used ₹10.0326 crore, largely because fixed-asset purchases totalled ₹9.8718 crore. Fiscal 2026 fixed-asset purchases were ₹55.25 lakh, partly offset by ₹15.16 lakh of interest income.

What do the June 2026 figures and customer concentration show?

The Company continued to consume operating cash in the three months ended June 30, 2026. Net cash used in operating activities was ₹11.159 crore despite operating profit before changes in working capital of ₹14.1808 crore. Trade receivables increased by ₹27.3047 crore and inventories by ₹15.3879 crore during the three-month period, while trade payables increased by ₹14.756 crore.

Financing activities generated ₹11.465 crore in the June 2026 quarter, mainly through ₹11.5364 crore of short-term borrowing proceeds and ₹13.56 lakh of long-term borrowing proceeds, less ₹20.70 lakh of finance costs. Cash and cash equivalents increased marginally to ₹5.2277 crore at June 30, 2026 from ₹5.1534 crore at March 31, 2026. Total current assets were ₹197.2585 crore and current liabilities were ₹96.3781 crore at June 30, 2026.

The Company identifies trade receivables as a credit-risk exposure because a customer may not meet obligations under a contract. Its top five customers accounted for 78.65% of Fiscal 2026 revenue, down from 87.86% in Fiscal 2025 and 99.49% in Fiscal 2024, while its largest customer accounted for 29.87% in Fiscal 2026. The Company states that it considers customers creditworthy, but also states that there can be no assurance counterparties will not default.

Conclusion

The Company’s Fiscal 2026 cash flow shows that operating profit and operating cash moved in different directions as receivables, inventories and short-term advances expanded. The ₹46.851 crore operating cash outflow was substantially larger than the ₹8.9436 crore outflow in Fiscal 2025, while equity issuance and financing inflows supported cash balances and the growth in working-capital requirements.

The next disclosed items to watch are whether the June 2026 receivables balance of ₹100.5649 crore and inventory balance of ₹52.816 crore convert into cash, and the use of subsequent funding. After June 30, 2026, The Company availed an Emergency Credit Line Guarantee Scheme 5.0 facility of ₹1.6207 crore, repayable over 60 months and secured by a second charge over receivables, fixed deposits, specified assets and current assets.