TNA Solutions’ profits coincided with operating cash burn

TNA Solutions Limited reported profit after tax of Rs 9.5835 crore in FY26, but its operating activities used Rs 18.4727 crore of cash. TNA Solutions’ cash outflow reflected working-capital additions, led by a Rs 17.9644 crore cash use for trade receivables and a Rs 11.4154 crore use for inventory.

Why did TNA Solutions report profit but burn operating cash?

TNA Solutions reported positive accounting profit but negative operating cash flow because additions to working capital exceeded cash generated before those changes. Working capital is the funding tied up in current operating assets and liabilities, including inventory, customer receivables and supplier payables. In FY26, the cash-flow statement shows receivables absorbing Rs 17.9644 crore, inventory absorbing Rs 11.4154 crore and other current assets absorbing Rs 5.7601 crore.

The company reported operating profit before working-capital changes of Rs 15.6020 crore in FY26. After the stated movements in current assets and liabilities, cash generated from operations was negative Rs 15.9338 crore; income taxes paid of Rs 2.5390 crore brought net cash from operating activities to negative Rs 18.4727 crore. The FY26 operating cash outflow was larger than the negative Rs 8.5698 crore reported for the year ended March 31, 2024.

The difference arises from the company’s accrual accounting policy. TNA Solutions recognises sales after goods are transferred to customers, when economic benefits are probable and revenue can be measured reliably, while operating cash flow records collections and payments. FY26 revenue from operations was Rs 104.5872 crore and profit after tax was Rs 9.5835 crore, but the year-end balance sheet carried Rs 36.5384 crore of trade receivables.

How quickly did TNA Solutions’ working capital increase?

TNA Solutions’ working capital increased substantially between March 31, 2024 and March 31, 2026, especially through receivables and inventory. Trade receivables rose by Rs 32.6203 crore over the two years, from Rs 3.9181 crore to Rs 36.5384 crore. Inventories increased by Rs 17.5373 crore, from Rs 18.5179 crore to Rs 36.0552 crore.

Receivables and inventories together totalled Rs 72.5936 crore at March 31, 2026, equal to about 84.5% of the Rs 85.9416 crore of listed current assets. This concentration means conversion of stock into sales and collection of customer dues are central to liquidity. The accounting policy values raw materials and other stocks at cost on a first-in, first-out basis or net realisable value, whichever is lower; finished goods, traded goods and work in progress are also valued at the lower of cost and net realisable value.

The balance-sheet movement and cash-flow movement are not identical in the supplied statements. Trade receivables rose by Rs 19.1513 crore between the March 2025 and March 2026 balance sheets, while the FY26 cash-flow statement records a Rs 17.9644 crore cash use for receivables; no reconciliation is provided. Trade payables increased by Rs 68.56 lakh in the FY26 cash-flow statement and other current liabilities increased by Rs 1.5932 crore, both materially below the Rs 35.1399 crore combined cash use reported for receivables, inventories and other current assets.

How was TNA Solutions’ FY26 cash deficit financed?

TNA Solutions funded the combined FY26 operating and investing cash outflows mainly through financing inflows. The cash-flow statement reports net cash from financing activities of Rs 20.8618 crore, following negative operating cash flow of Rs 18.4727 crore and negative investing cash flow of Rs 5.5698 crore.

The company received Rs 45.9634 crore in borrowings and repaid Rs 24.4896 crore during FY26. It also recorded Rs 3.5000 crore from issue of share capital and a negative Rs 91.04 lakh movement labelled “ODI”; the supplied cash-flow statement does not define ODI. Interest paid was Rs 3.2022 crore, while the profit-and-loss statement reported FY26 finance costs of Rs 4.9512 crore.

Borrowings on the balance sheet also increased. Short-term borrowings rose by Rs 16.5317 crore to Rs 40.8918 crore at March 31, 2026, and long-term borrowings rose by Rs 4.0323 crore to Rs 5.4019 crore. Combined borrowings therefore increased by Rs 20.5639 crore to Rs 46.2937 crore, from Rs 25.7297 crore at March 31, 2025.

Investing activities used Rs 5.5698 crore in FY26, comprising Rs 3.7316 crore for fixed assets including intangible assets and Rs 1.1423 crore for other non-current assets, partly offset by Rs 41,000 of interest received. The cash-flow statement reports a net cash decrease of Rs 3.1807 crore. Its closing-cash line shows Rs 21.21 lakh, whereas the reconciliation and the March 31, 2026 balance sheet show cash and cash equivalents of Rs 9.21 lakh; the supplied statements do not explain the difference.

Does TNA Solutions’ profit growth remove its working-capital dependence?

TNA Solutions’ reported profit growth does not by itself remove the need to convert inventory and receivables into cash or to access external funding. Profit after tax increased from Rs 2.6874 crore in FY24 to Rs 6.6580 crore in FY25 and Rs 9.5835 crore in FY26. Revenue from operations rose from Rs 35.8508 crore in FY24 to Rs 81.4860 crore in FY25 and Rs 104.5872 crore in FY26.

Cash flow followed a different pattern. Net cash from operating activities was negative Rs 8.5698 crore in FY24 and negative Rs 18.4727 crore in FY26, the two columns explicitly labelled as years ended March 31. The middle cash-flow column is labelled “Period Ended March 31, 2024” despite being positioned between FY26 and FY24 and showing negative operating cash flow of Rs 17.2580 crore, so the supplied presentation does not support treating that column as a clearly labelled FY25 comparison.

For internally generated cash to cover the operating cycle, stock must be sold and customer balances collected in time to meet taxes, interest, supplier payments and capital expenditure. Finance costs rose from Rs 1.2424 crore in FY24 to Rs 3.1628 crore in FY25 and Rs 4.9512 crore in FY26 alongside higher borrowings. The FY26 profit-and-loss statement also presents Rs 12.6865 crore as profit before exceptional and extraordinary items and tax, but Rs 12.8865 crore as profit before tax; the cash-flow statement uses Rs 12.8865 crore as net profit before tax.

Conclusion

TNA Solutions combined rising revenue and reported profit with a balance sheet increasingly concentrated in inventory and customer receivables. In FY26, the Rs 18.4727 crore operating cash outflow exceeded the Rs 9.5835 crore profit after tax because reported cash uses for receivables, inventory and other current assets outweighed the limited cash support from payables and other current liabilities.

The disclosed figures make future collections from Rs 36.5384 crore of receivables, movement in Rs 36.0552 crore of inventories and changes in Rs 46.2937 crore of combined borrowings key items to monitor. The proposed initial public offering documentation may also need to resolve the cash-balance difference between Rs 21.21 lakh in the cash-flow closing line and Rs 9.21 lakh in its reconciliation and balance sheet, as well as the inconsistent intermediate cash-flow period label.