Leapfrog operating cash outflow widens to Rs 33.4807 crore

Leapfrog Engineering Services Limited used Rs 33.4807 crore in operating activities in the half year ended September 30, 2026, compared with Rs 8.9197 crore a year earlier, as Rs 23.2731 crore deployed in loans and advances and Rs 25.8558 crore in other current assets outweighed reported profit.

Why did Leapfrog's operating cash outflow widen?

Leapfrog's operating cash outflow widened by Rs 24.561 crore year on year, from Rs 8.9197 crore in the half year ended September 30, 2025 to Rs 33.4807 crore in the corresponding 2026 period. Cash used in operations before income taxes was Rs 33.3437 crore, against Rs 8.6914 crore in the earlier half, while net income taxes paid were Rs 13.69 lakh, compared with Rs 22.83 lakh.

The outflow occurred despite accounting profit. Leapfrog reported profit before tax of Rs 6.1953 crore and profit for the period of Rs 4.4863 crore for the September 2026 half year, versus Rs 8.5494 crore and Rs 6.0953 crore respectively a year earlier. The cash-flow statement starts with profit before tax, adds Rs 94.50 lakh of depreciation and amortisation and Rs 3.5539 crore of finance costs, and deducts Rs 54.64 lakh of interest income.

These adjustments resulted in operating profit before working-capital changes of Rs 10.1477 crore in the September 2026 half year. The comparable cash-flow statement reported Rs 10.61 lakh before working-capital changes for the half year ended September 30, 2025. Movements in current assets and liabilities then turned the 2026 pre-working-capital amount into cash used in operations.

How did working-capital movements affect Leapfrog's cash flow?

Loans and advances and other current assets were Leapfrog's two largest operating cash uses, absorbing a combined Rs 49.1289 crore in the September 2026 half year. Loans and advances used Rs 23.2731 crore, up from Rs 4.648 crore used a year earlier, while other current assets used Rs 25.8558 crore after generating Rs 7.3819 crore in the prior-year period.

The balance sheet records corresponding increases between March 31, 2026 and September 30, 2026. Short-term loans and advances rose from Rs 21.1712 crore to Rs 44.4443 crore, while other current assets increased from Rs 14.0559 crore to Rs 39.9117 crore. The filing does not provide an item-by-item composition for either current-asset balance.

Trade receivables generated Rs 7.3434 crore in the September 2026 half year, compared with Rs 3.4076 crore in the year-earlier period. Other current liabilities generated Rs 13.0054 crore, reversing a Rs 3.3165 crore use in the prior period. These inflows were offset further by Rs 3.6255 crore used for inventories and Rs 11.3989 crore used for trade payables, while provisions generated Rs 31.31 lakh.

How did Leapfrog's profit compare with revenue growth?

Leapfrog's profit for the period fell to Rs 4.4863 crore in the September 2026 half year even as business-segment revenue rose to Rs 64.4136 crore from Rs 38.3655 crore a year earlier. The filing's indirect cash-flow statement shows that the increase in current-asset deployment was larger than the Rs 10.1477 crore operating profit before working-capital changes.

Contract revenue rose to Rs 51.5275 crore from Rs 34.747 crore, while sale of services increased to Rs 12.8236 crore from Rs 1.2811 crore. Sale of products declined to Rs 6.25 lakh from Rs 2.3374 crore. Contract-segment profit was Rs 6.8309 crore, down from Rs 11.0912 crore, while service-segment profit increased to Rs 9.7034 crore from Rs 4.27 lakh.

Unallocated corporate expenses rose to Rs 9.0497 crore in the September 2026 half year from Rs 4.2446 crore a year earlier. Operating profit was Rs 7.4397 crore compared with Rs 7.5742 crore, and finance costs increased to Rs 3.5539 crore from Rs 2.4061 crore. GRSM & Associates issued an unmodified limited-review conclusion on the unaudited standalone results dated November 12, 2026.

What funded Leapfrog's operating and investing cash uses?

Leapfrog generated Rs 75.4866 crore from financing activities during the September 2026 half year, funding both the operating outflow and Rs 41.4051 crore of investing cash use. Proceeds from issue of share capital, net of issue expenses, were Rs 68.7967 crore; long-term borrowings contributed Rs 12.99 crore; and net short-term borrowings added Rs 7.2489 crore.

Financing inflows were reduced by Rs 9.9951 crore of long-term borrowing repayments and Rs 3.5539 crore of interest and finance charges paid. In the comparable September 2025 half year, financing activities generated Rs 9.0231 crore, principally including Rs 10.2532 crore from the net movement in short-term borrowings.

Investing activities used Rs 41.4051 crore in the September 2026 half year, compared with Rs 7.54 lakh in the prior-year half. Leapfrog spent Rs 27.7965 crore on property, plant and equipment and intangible assets, including work in progress, and invested Rs 15.8245 crore in term deposits. Interest received was Rs 54.64 lakh, while movement in other non-current assets generated Rs 1.6694 crore.

How much of Leapfrog's IPO proceeds remained unutilised?

Leapfrog had Rs 10.6004 crore of unutilised fresh-issue proceeds at September 30, 2026, after using Rs 68.998 crore from the Rs 79.5984 crore raised in its June 2026 initial public offering. The company issued 3,46,08,000 equity shares at Rs 23 each and listed on the BSE SME platform on June 24, 2026.

Of the amount remaining, Rs 10.2909 crore was allocated to setting up an assembling unit. The company had used Rs 16.7127 crore, or 61.89%, of the Rs 27.0036 crore allocated to that object. It had also used Rs 36.8066 crore of Rs 36.8125 crore allocated to working-capital requirements and Rs 9.1519 crore of Rs 9.4555 crore allocated to general corporate purposes.

Conclusion

Leapfrog's September 2026 half-year filing shows that operating cash use increased substantially even as revenue reached Rs 64.4136 crore and the company reported Rs 4.4863 crore of profit for the period. The key movements were the Rs 23.2731 crore deployment in loans and advances and the Rs 25.8558 crore use in other current assets, alongside Rs 41.4051 crore of investing cash use.

The next disclosure to watch is the deployment of Rs 10.6004 crore of IPO proceeds that remained unutilised at September 30, 2026, especially the Rs 10.2909 crore allocated to the assembling unit. Leapfrog's filing also shows Rs 5.90 lakh remaining under working-capital requirements and Rs 30.36 lakh under general corporate purposes.