Jindal Supreme's IPO reset cut debt-equity to 0.4 in H1FY27

Jindal Supreme (India) Limited reduced its calculated borrowings-to-equity ratio to 0.4 at H1FY27 from 1.2 at FY26 after a Rs 99.89 crore fresh IPO issue, but it reported net cash used in operating activities of Rs 6.37 crore as a Rs 32.60 crore working-capital outflow exceeded pre-working-capital operating profit.

How did Jindal Supreme's leverage change in H1FY27?

Jindal Supreme's calculated borrowings-to-equity ratio fell to 0.4 at H1FY27, based on total borrowings of Rs 89.09 crore and total equity of Rs 214.85 crore. Total borrowings combine Rs 76.61 crore of current borrowings and Rs 12.48 crore of non-current borrowings, excluding lease liabilities of Rs 2.61 crore.

At FY26, the same calculation was 1.2, using Rs 119.87 crore of borrowings and Rs 96.82 crore of equity. Borrowings declined by Rs 30.78 crore while equity increased by Rs 118.03 crore. The Rs 99.89 crore fresh IPO issue was the relevant funding event, although the presentation does not provide a bridge from the issue proceeds to individual balance-sheet or cash-flow items.

Jindal Supreme's asset base also expanded during the period, with total assets increasing by Rs 95.95 crore to Rs 344.36 crore. Current assets rose to Rs 236.97 crore from Rs 148.94 crore, while capital work-in-progress increased to Rs 17.20 crore from Rs 7.19 crore. Property, plant and equipment was Rs 87.13 crore at H1FY27, compared with Rs 87.63 crore at FY26.

What drove Jindal Supreme's higher cash balance?

Jindal Supreme ended H1FY27 with cash and cash equivalents of Rs 38.47 crore, compared with Rs 1 lakh at FY26, because financing activities generated Rs 54.57 crore during the half year. That inflow exceeded the Rs 6.37 crore net operating cash outflow and Rs 9.75 crore net investing cash outflow, resulting in a Rs 38.46 crore increase in cash.

The financing inflow was substantially higher than Rs 3.84 crore in H1FY26, when closing cash was reported as nil. The presentation does not split H1FY27 financing cash flow between the fresh issue, borrowings, repayments and other financing movements. However, the balance sheet shows that total borrowings at H1FY27 were Rs 30.78 crore lower than at FY26.

Cash was the largest individual contributor to the rise in current assets. Inventories increased to Rs 114.97 crore from Rs 100.31 crore, trade receivables rose to Rs 42.53 crore from Rs 33.24 crore, and other current assets increased to Rs 40.75 crore from Rs 15.38 crore. The figures show that the additional funding coincided with higher cash holdings and a larger operating asset base.

Why did Jindal Supreme report negative operating cash flow?

Jindal Supreme reported net cash used in operating activities of Rs 6.37 crore in H1FY27 because a Rs 32.60 crore working-capital outflow and Rs 4.50 crore of direct taxes paid outweighed cash generated before those items. Cash generated from operations was negative Rs 1.87 crore, against a positive Rs 2.24 crore in H1FY26.

The operating cash result weakened despite higher profit before tax. Profit before tax rose 79% year on year to Rs 25.40 crore from Rs 14.20 crore, while adjustments were Rs 5.33 crore compared with Rs 5.65 crore. Operating profit before working-capital changes therefore rose to Rs 30.73 crore from Rs 19.85 crore, but the working-capital outflow increased to Rs 32.60 crore from Rs 17.61 crore.

The comparison with FY26 shows that working-capital cash absorption also occurred in the prior full year. FY26 recorded operating profit before working-capital changes of Rs 41.43 crore, a Rs 40.51 crore working-capital outflow and net cash used in operating activities of Rs 5.69 crore. In H1FY27 alone, the operating cash outflow of Rs 6.37 crore had exceeded the FY26 full-year outflow.

How did working-capital movements compare with operating growth?

Jindal Supreme's Rs 32.60 crore working-capital outflow in H1FY27 was Rs 14.99 crore higher than the Rs 17.61 crore outflow in H1FY26, while revenue from operations increased 23% to Rs 407.16 crore. The outflow was Rs 1.87 crore greater than the Rs 30.73 crore operating profit before working-capital changes, leaving operations cash-negative before direct tax payments.

The balance sheet recorded a Rs 14.66 crore rise in inventory and a Rs 9.29 crore increase in trade receivables between FY26 and H1FY27. Trade payables rose by Rs 1.44 crore over the same period, to Rs 14.15 crore from Rs 12.71 crore. These period-end changes are consistent with more funds being deployed in operating assets, although the presentation does not reconcile individual balance-sheet movements to the working-capital cash-flow figure.

Reported earnings improved across the half year. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 64% to Rs 30.70 crore in H1FY27 from Rs 18.70 crore in H1FY26, and the EBITDA margin rose to 7.5% from 5.7%. Profit after tax increased 72% to Rs 18.19 crore from Rs 10.58 crore, indicating that the operating cash outflow reflected working-capital and tax cash movements rather than lower reported profit.

Conclusion

Jindal Supreme's H1FY27 accounts show a materially changed funding position: total borrowings fell to Rs 89.09 crore, equity reached Rs 214.85 crore and cash and cash equivalents rose to Rs 38.47 crore. At the same time, the Rs 6.37 crore operating cash outflow shows that higher EBITDA of Rs 30.70 crore and profit after tax of Rs 18.19 crore had not translated into positive operating cash during the half year.

The next disclosure to watch is whether working-capital absorption moderates from Rs 32.60 crore as revenue develops beyond the H1FY27 level of Rs 407.16 crore. Capital work-in-progress stood at Rs 17.20 crore, up from Rs 7.19 crore at FY26, but the presentation does not provide a completion timetable, a future operating cash-flow target or a detailed bridge for the H1FY27 financing inflow.