IZMO Limited Reports Rs 1.98 Crore H1 Cash Outflow

IZMO Limited reported a standalone operating cash outflow of Rs 1.98 crore for the half year ended September 30, 2026, despite profit after tax of Rs 24.65 lakh. A Rs 7.17 crore rise in trade receivables and a Rs 2.52 crore increase in short-term loans and advances outweighed other working-capital movements.

Why did IZMO report an operating cash outflow in H1?

IZMO reported the Rs 1.98 crore operating cash outflow because working-capital uses exceeded Rs 1.89 crore of operating profit before working-capital changes in the half year ended September 30, 2026. Profit before tax was Rs 87.87 lakh, with adjustments including Rs 93.06 lakh of depreciation, Rs 43.33 lakh of interest expense, Rs 1.32 crore of interest income and Rs 1.06 crore of employee stock-option expense.

The largest stated use was the Rs 7.17 crore increase in trade receivables, followed by the Rs 2.52 crore increase in short-term loans and advances. A Rs 6.27 crore increase in current liabilities and provisions partly offset these movements, leaving cash generated from operations negative at Rs 1.54 crore; direct taxes paid of Rs 44.47 lakh then resulted in the Rs 1.98 crore net operating outflow.

The operating outflow narrowed from Rs 5.04 crore in the half year ended September 30, 2025. The prior period included a Rs 4.51 crore receivables increase and a Rs 2.99 crore decrease in current liabilities and provisions, whereas the latter category increased in the 2026 period despite the larger receivables movement.

How much did IZMO's receivables increase?

IZMO's trade receivables increased by Rs 7.17 crore to Rs 33.89 crore at September 30, 2026, from Rs 26.72 crore at March 31, 2026. The balance-sheet change matches the Rs 7.17 crore deduction in the cash-flow statement, making receivables the largest specified working-capital use in the half year.

Current assets increased to Rs 70.21 crore at September 30 from Rs 63.41 crore at March 31. Other financial assets rose to Rs 33.30 crore from Rs 30.65 crore, while IZMO reported no inventory at either date, leaving receivables, other financial assets and cash as the principal stated current-asset balances.

The statutory auditor's limited-review report dated November 13, 2026 said that balances of sundry debtors, inventories, loans and advances, and current liabilities were subject to confirmation and reconciliation. The reviewer also stated that nothing had come to attention suggesting that the standalone results failed to disclose information required under applicable accounting standards and listing regulations.

Did IZMO remain profitable while operating cash flow was negative?

IZMO remained profitable on a standalone accounting basis, reporting Rs 24.65 lakh of profit after tax for the half year ended September 30, 2026, compared with Rs 51.72 lakh a year earlier. Profit before tax declined to Rs 87.87 lakh from Rs 1.12 crore, while the 2026 period included total tax expense of Rs 63.22 lakh against a net tax credit of Rs 18.27 lakh in the prior-year period.

Revenue from operations fell to Rs 21.40 crore from Rs 22.25 crore, and total income declined to Rs 23.31 crore from Rs 24.30 crore. Employee-benefit expense declined to Rs 17.89 crore from Rs 19.45 crore, but other expenses increased to Rs 2.62 crore from Rs 2.05 crore; total expenses decreased to Rs 22.43 crore from Rs 23.17 crore.

The quarter ended September 30, 2026 accounted for Rs 19.58 lakh of the half-year profit after tax, compared with Rs 5.07 lakh in the quarter ended June 30, 2026. Quarterly revenue from operations rose to Rs 11.46 crore from Rs 9.94 crore and quarterly profit before tax increased to Rs 82.80 lakh from Rs 5.07 lakh.

Where did IZMO's cash balance stand at September 30?

IZMO ended September 30, 2026 with Rs 3.02 crore of cash and cash equivalents, down from Rs 6.04 crore at the start of the financial year. The Rs 3.02 crore decrease reflected the Rs 1.98 crore operating outflow, Rs 94.53 lakh reported from investing activities and Rs 1.98 crore used in financing activities.

Investing activities produced Rs 94.53 lakh of net cash in the half year because Rs 1.32 crore of interest received and Rs 9.33 lakh of rental income exceeded Rs 46.75 lakh of fixed-asset purchases. In the corresponding 2025 half year, investing activities used Rs 2.70 crore, including Rs 3.62 crore classified as a right-of-use asset cash flow.

Financing activities used Rs 1.98 crore in the 2026 half year, comprising Rs 88.12 lakh of term-borrowing repayments, Rs 68.69 lakh of changes in lease liabilities and Rs 43.33 lakh of interest paid, partly offset by Rs 1.77 lakh of equity-share capital proceeds net of expenses. The corresponding period generated Rs 1.27 crore from financing activities, including Rs 1.71 crore from term-borrowing or loan-repayment movements.

What changed in IZMO's balance sheet and liabilities?

IZMO's total standalone assets rose to Rs 242.50 crore at September 30, 2026 from Rs 235.54 crore at March 31, 2026. Non-current investments increased to Rs 162.33 crore from Rs 161.39 crore, property, plant and equipment rose to Rs 1.92 crore from Rs 1.73 crore, and right-of-use assets declined to Rs 1.81 crore from Rs 2.42 crore.

Total equity increased to Rs 217.20 crore from Rs 214.93 crore, comprising Rs 14.98 crore of share capital and Rs 202.22 crore of other equity. Total current liabilities rose to Rs 19.41 crore from Rs 12.88 crore, driven principally by other current liabilities increasing to Rs 12.41 crore from Rs 4.80 crore.

Non-current borrowings declined to Rs 1.41 crore from Rs 2.29 crore, while non-current lease liabilities declined to Rs 73.12 lakh from Rs 1.42 crore. Current trade payables to micro and small enterprises fell to Rs 6.48 lakh from Rs 71.19 lakh, and payables to other enterprises fell to Rs 44.70 lakh from Rs 80.07 lakh, alongside the aggregate Rs 6.27 crore increase in current liabilities and provisions in the cash-flow statement.

Conclusion

IZMO's standalone half-year figures show that reported profitability did not translate into operating cash generation in the period ended September 30, 2026. Profit after tax was Rs 24.65 lakh, while receivables increased Rs 7.17 crore and operating activities consumed Rs 1.98 crore, reducing cash and cash equivalents to Rs 3.02 crore.

The next disclosure to watch is whether receivables of Rs 33.89 crore are converted into cash and how other current liabilities, which rose to Rs 12.41 crore, develop. The confirmation and reconciliation of sundry debtors, loans and advances, and current liabilities identified in the November 13, 2026 limited-review report also remains unresolved.