Maharaja & Speedex FY26 profit outpaced operating cash flow

Maharaja & Speedex India Limited reported Rs 19.19 crore of profit before tax in FY26 but Rs 3.66 crore of net operating cash flow. Maharaja & Speedex’s cash generation was reduced by Rs 16.55 crore absorbed by inventory and Rs 6.81 crore by trade receivables, while cash and cash equivalents ended FY26 at Rs 46.42 lakh.

Why did Maharaja & Speedex’s FY26 operating cash flow lag profit?

Maharaja & Speedex’s FY26 operating cash flow lagged profit because working-capital movements reduced the cash available from operating activities before tax. Operating cash flow is cash generated by normal operations after changes in operating assets and liabilities, rather than the accrual-based profit before tax reported in the statement of profit and loss.

The cash-flow statement, prepared using the indirect method under Accounting Standard 3, reports Rs 23.58 crore of operating profit before working-capital changes in FY26. It starts with profit before tax of Rs 19.19 crore and lists additions including Rs 1.93 crore of depreciation and amortisation, Rs 1.40 crore of finance cost, Rs 73.66 lakh of unrealised profit on opening and closing stock, and Rs 12.42 lakh of profit on sale of assets. The individual listed figures add to Rs 23.38 crore rather than the reported Rs 23.58 crore subtotal, an internal difference of Rs 20.00 lakh.

The statement reports Rs 5.62 crore of cash generated from operations before income tax and Rs 1.96 crore of net income tax paid, resulting in Rs 3.66 crore of net operating cash flow. In FY25, Maharaja & Speedex reported Rs 7.49 crore of profit before tax and Rs 2.05 crore of operating cash flow. FY26 profit before tax therefore rose by Rs 11.70 crore, while operating cash flow rose by Rs 1.62 crore.

How much cash did inventory and receivables absorb in FY26?

Inventory and trade receivables together absorbed Rs 23.36 crore of Maharaja & Speedex’s FY26 operating cash flow before other working-capital movements. The cash-flow statement records a Rs 16.55 crore inventory outflow and a Rs 6.81 crore receivables outflow, partly offset by a Rs 9.32 crore increase in trade payables.

The March 31 balance sheet shows that funds tied up in stock and customer dues increased during FY26. Inventories rose to Rs 36.17 crore at March 31, 2026 from Rs 20.36 crore a year earlier, while trade receivables rose to Rs 19.35 crore from Rs 12.54 crore. The combined Rs 55.52 crore represented about 68% of total assets of Rs 81.98 crore at March 31, 2026.

Maharaja & Speedex values inventory at the lower of cost and net realisable value, using the weighted-average cost method. Net realisable value means estimated selling price in the ordinary course of business less estimated completion and selling costs. The financial statements do not disclose product mix, inventory ageing, customer credit terms, or reasons why the Rs 16.55 crore cash-flow outflow exceeded the Rs 15.82 crore increase in the inventory balance-sheet carrying amount.

Did borrowing and supplier credit support Maharaja & Speedex’s cash position?

Borrowing and supplier credit provided cash support in FY26, although the reported cash-flow categories do not reconcile to the stated movement in cash. Maharaja & Speedex reported Rs 8.63 crore of borrowing proceeds and Rs 7.23 crore of net financing cash inflow after Rs 1.40 crore of finance cost paid.

Short-term borrowings increased to Rs 22.70 crore at March 31, 2026 from Rs 10.91 crore at March 31, 2025. Long-term borrowings declined to Rs 3.97 crore from Rs 7.12 crore, leaving total reported borrowings of Rs 26.66 crore, compared with Rs 20.04 crore a year earlier. Trade payables increased to Rs 20.39 crore from Rs 11.07 crore, including Rs 16.22 crore due to parties other than micro, small and medium enterprises.

Maharaja & Speedex reported Rs 16.51 crore of net investing cash outflow in FY26, including Rs 11.17 crore for property, plant, equipment and intangible assets and Rs 52.54 lakh for long-term loans and advances. However, the itemised investing lines shown in the statement total Rs 11.69 crore of outflows after Rs 13,000 of asset-sale proceeds, rather than the reported Rs 16.51 crore net investing outflow. Using the reported operating, investing and financing totals would produce a Rs 5.62 crore decrease in cash, whereas the statement reports a Rs 71.57 lakh decrease from Rs 1.18 crore to Rs 46.42 lakh.

What would need to change for Maharaja & Speedex’s cash conversion to improve?

Maharaja & Speedex’s cash conversion would improve if additions to inventory and trade receivables stopped absorbing cash at FY26 levels, or if customer collections rose without proportionate further additions to those balances. The company has determined a 12-month operating cycle for classifying current and non-current assets and liabilities under its accounting policies.

Revenue from operations increased to Rs 122.65 crore in FY26 from Rs 93.51 crore in FY25 and Rs 61.32 crore in FY24. Profit before tax rose to Rs 19.19 crore in FY26 from Rs 7.49 crore in FY25 and Rs 1.45 crore in FY24. Net operating cash flow rose from Rs 2.05 crore to Rs 3.66 crore over the latest year, but its increase remained below the rise in reported profit before tax.

Maharaja & Speedex recognises sales when substantial risks and rewards of ownership pass to the buyer under the relevant contract, net of rebates, sales taxes and excise duties. That policy determines when revenue is recorded, while operating cash depends on customer payments, inventory purchases and supplier settlements. A sustained change in cash conversion would therefore require growth in reported sales to be accompanied by cash collections and controlled working-capital additions.

Conclusion

Maharaja & Speedex’s FY26 statements show that Rs 19.19 crore of profit before tax did not translate directly into operating cash flow. Inventory and trade receivables absorbed Rs 23.36 crore, while higher trade payables, other operating movements and tax payments resulted in reported net operating cash flow of Rs 3.66 crore. Inventory and receivables together accounted for Rs 55.52 crore of the company’s Rs 81.98 crore total assets at March 31, 2026.

The next disclosure to watch is whether Maharaja & Speedex explains the cash-flow statement’s internal differences and whether inventory and receivables convert into cash within its stated 12-month operating cycle. The FY26 cash-flow statement leaves unresolved the Rs 20.00 lakh difference in the operating-profit subtotal, the gap between its itemised and reported investing outflows, and the reconciliation of reported cash-flow totals to the Rs 71.57 lakh decline in year-end cash.