MM Forgings reports Rs 6.09 crore H1 operating cash

M M Forgings Limited generated Rs 6.09 crore of net cash from operating activities in the half-year ended 30 September 2026, despite Rs 162.39 crore of profit before tax, after working-capital movements absorbed Rs 160.89 crore and income taxes paid used Rs 15.78 crore. Operating profit before working-capital changes was Rs 182.76 crore.

How did MM Forgings' profit translate into operating cash?

MM Forgings converted Rs 162.39 crore of profit before tax into Rs 182.76 crore of operating profit before working-capital changes during the half-year ended 30 September 2026, but ended with Rs 6.09 crore of net operating cash. The profit before tax included a Rs 64.29 crore exceptional gain on the sale of land in the quarter ended 30 June 2026.

The cash-flow reconciliation added back Rs 56.96 crore of depreciation and amortisation and Rs 35.05 crore of finance costs. It deducted the Rs 64.21 crore profit on sale or write-off of assets, Rs 0.94 crore of net interest income and Rs 6.40 crore of dividend income, resulting in the Rs 182.76 crore pre-working-capital figure.

MM Forgings' accounting profit and operating cash differed because the cash-flow statement measures changes in operating balances as well as tax payments. After the Rs 160.89 crore working-capital outflow, cash generated from operations was Rs 21.87 crore, and the Rs 15.78 crore tax payment reduced that amount to Rs 6.09 crore.

Which working-capital balances absorbed MM Forgings' cash?

MM Forgings' trade receivables were the largest working-capital use of cash, rising by Rs 77.71 crore in the half-year ended 30 September 2026. Inventories increased by Rs 36.09 crore and short-term loans and advances rose by Rs 8.36 crore, together using Rs 122.16 crore of cash.

Other non-current assets used Rs 7.65 crore, while other current assets used Rs 3.04 lakh. Long-term loans and advances provided a Rs 15.26 lakh offset, but this was small relative to the increase in trade receivables and inventory.

MM Forgings also recorded cash use from operating liabilities. Trade payables decreased by Rs 26.88 crore, other current liabilities fell by Rs 1.41 crore, and other long-term liabilities and short-term provisions declined by Rs 2.93 crore; these movements reduced the financing available from supplier and other operating balances.

The consolidated balance sheet reflects these movements at 30 September 2026. Trade receivables were Rs 496.22 crore, compared with Rs 418.51 crore at 31 March 2026, while inventories rose to Rs 370.14 crore from Rs 334.06 crore and trade payables declined to Rs 173.39 crore from Rs 200.27 crore.

How does MM Forgings' H1 cash flow compare with FY26?

MM Forgings' Rs 6.09 crore of H1 operating cash was below the Rs 229.69 crore reported for the year ended 31 March 2026, although the reported periods cover six and 12 months respectively. Working capital used Rs 160.89 crore in the half-year, compared with a Rs 40.10 crore outflow in FY26.

The change was evident in inventory and receivables. FY26 inventory movements generated Rs 7.64 crore of cash, whereas inventories used Rs 36.09 crore in the half-year ended 30 September 2026; the receivables outflow also rose to Rs 77.71 crore from Rs 58.54 crore in FY26.

Reported profit composition also differed between the periods. The half-year's Rs 162.39 crore pre-tax profit included the Rs 64.29 crore land-sale gain, while the FY26 cash-flow statement recorded Rs 0.65 crore of profit on sale or write-off of assets.

How did investing and financing activities affect MM Forgings' cash?

MM Forgings generated Rs 8.13 crore of net investing cash in the half-year ended 30 September 2026. Proceeds of Rs 76.53 crore from fixed-asset sales exceeded Rs 70.12 crore of capital expenditure, including capital work-in-progress, while long-term investments used Rs 5.82 crore.

The fixed-asset sale proceeds relate to the land transaction disclosed as a Rs 64.29 crore exceptional profit in the quarter ended 30 June 2026. The company classified Rs 76.53 crore of sale proceeds as investing cash flow, rather than operating cash flow, while recording Rs 0.94 crore of interest received and Rs 6.40 crore of dividends received in investing activities.

MM Forgings generated Rs 18.95 crore of net financing cash, including a Rs 55.44 crore increase in working-capital borrowings and Rs 17.87 crore of proceeds from long-term borrowings. Finance costs paid were Rs 35.05 crore and dividends paid were Rs 19.31 crore.

Short-term borrowings stood at Rs 533.04 crore on 30 September 2026, up from Rs 477.60 crore at 31 March 2026. Long-term borrowings rose to Rs 602.01 crore from Rs 596.15 crore, while cash and cash equivalents on the balance sheet increased to Rs 256.42 crore from Rs 224.56 crore.

Conclusion

MM Forgings reported a substantial difference between profit and operating cash in the half-year ended 30 September 2026: Rs 162.39 crore of profit before tax translated into Rs 6.09 crore of net operating cash. Higher receivables and inventories, alongside lower trade payables, accounted for most of the Rs 160.89 crore working-capital cash absorption.

The next disclosures will show whether trade receivables of Rs 496.22 crore and inventories of Rs 370.14 crore at 30 September 2026 decline or continue to require cash. They will also indicate whether short-term borrowings, which rose to Rs 533.04 crore, remain elevated after the half-year-end.