OBSC Perfection cash outflow reaches Rs 44.82 crore in H1

OBSC Perfection Limited used Rs 44.82 crore in net operating cash in H1 FY27 despite profit after tax rising 107% year on year to Rs 21.83 crore, as current assets increased Rs 76.29 crore and net trade working capital rose Rs 42.76 crore by 30 September 2026. OBSC Perfection funded the cash requirement through financing inflows.

What caused OBSC Perfection's H1 FY27 operating cash outflow?

OBSC Perfection's operating cash outflow resulted mainly from the increase in current assets exceeding cash generated before working-capital movements. Operating profit before working-capital changes was Rs 32.04 crore in H1 FY27, including profit before tax of Rs 23.95 crore, depreciation and amortisation of Rs 4.56 crore, and interest and finance charges of Rs 4.24 crore. The increase in current assets absorbed Rs 76.29 crore, while current liabilities increased only Rs 2.03 crore.

Cash flow from operating activities was therefore negative Rs 42.22 crore before direct taxes paid of Rs 2.60 crore, producing net cash used in operating activities of Rs 44.82 crore. This was a marked change from positive operating cash flow of Rs 5.00 crore in FY24 and Rs 8.85 crore in FY25. Operating cash flow had already turned negative at Rs 1.95 crore in FY26 before widening in H1 FY27.

How did OBSC Perfection's working capital change by September 2026?

OBSC Perfection's net trade working capital increased 69% to Rs 104.93 crore at 30 September 2026 from Rs 62.18 crore at 31 March 2026. Trade receivables rose Rs 26.34 crore to Rs 92.42 crore, inventories increased Rs 12.59 crore to Rs 59.77 crore, and trade payables declined Rs 3.83 crore to Rs 47.26 crore. Together, these three balances increased net trade working capital by Rs 42.76 crore.

The Rs 76.29 crore cash-flow increase in current assets also reflects movements beyond trade balances. Short-term loans and advances increased Rs 44.28 crore to Rs 89.18 crore in H1 FY27. Management said it increased supplier advances in the second quarter to secure critical raw material for certain export projects and to manage near-term commodity-price volatility; it expects those advances to be adjusted against future supplies.

Cash and bank balances rose Rs 5.79 crore to Rs 22.44 crore during the half year, while total current liabilities declined marginally to Rs 91.34 crore from Rs 92.18 crore. The balance-sheet movement explains why the increase in current assets was larger than the increase in net trade working capital. It also occurred while revenue from operations increased 91% year on year to Rs 169.41 crore in H1 FY27.

Did OBSC Perfection improve collections and inventory efficiency?

OBSC Perfection improved debtor and inventory days in H1 FY27, but a sharper reduction in payable days lengthened its cash conversion cycle. Debtor days declined to 100 from 110 in FY26, while inventory days fell to 91 from 110. Management attributed the inventory movement partly to an earlier inventory buffer that supported uninterrupted supply during a period of rapid growth.

Management said collection initiatives undertaken over the preceding six to nine months helped reduce debtor days. Export customers accounted for about 45% of debtors, while exports contributed about 29% of H1 FY27 revenue. Export revenue rose 173% year on year to Rs 49.00 crore, compared with 70% growth in domestic revenue to Rs 120.42 crore.

The cash conversion cycle nevertheless increased 18 days to 119 days because payable days fell to 72 from 119 in FY26. Management said the 47-day decline in payable days outweighed the 10-day improvement in debtor days and the 19-day improvement in inventory days. It also cited geopolitical uncertainty affecting global trade, shipping availability, transit times and freight costs as a reason for more cautious procurement and inventory planning.

How did OBSC Perfection fund its H1 FY27 cash requirements?

OBSC Perfection funded its operating and investing cash requirements primarily through Rs 76.66 crore of net financing cash inflow in H1 FY27. The cash-flow statement records Rs 78.15 crore from increases in share capital and premium and Rs 2.75 crore from increased borrowings, offset by Rs 4.24 crore of interest and finance charges. Closing cash and cash equivalents increased to Rs 22.44 crore from Rs 16.66 crore at the start of the half year.

The presentation separately states that OBSC Perfection completed a preferential issue of Rs 86.52 crore in September 2026. Total equity increased to Rs 271.94 crore at 30 September 2026 from Rs 171.96 crore at FY26 end. The debt-equity ratio declined to 0.26 times from 0.40 times over the same period.

Investing activities used Rs 26.05 crore in H1 FY27, including Rs 19.31 crore spent on fixed assets and Rs 7.46 crore of capital advances towards land purchases, partly offset by Rs 0.71 crore of interest income. Property, plant and equipment increased to Rs 128.01 crore from Rs 112.20 crore at the end of FY26, while capital work in progress declined to Rs 4.61 crore from Rs 5.67 crore.

What expansion programme is linked to OBSC Perfection's cash needs?

OBSC Perfection's disclosed expansion programme includes land acquisition, new manufacturing capacity and procurement support for export execution. It acquired an additional 2.4 acres at Supa in Q1 FY27 and plans a ground-breaking for the mega facility in H2. Management says the proposed facility is intended to bring processes in-house, consolidate rented facilities and create about five times additional space for expansion.

The company reports about 11.8 acres acquired across Maharashtra and Gujarat, while its six operating facilities cover 177,041 square feet. It installed stamping capacity in H1 FY27 with more than 30 pneumatic presses and 13% utilisation. Management said the purchase provided recurring business of about Rs 2 crore a month.

Machining installed capacity increased to 757.2 lakh units per annum in H1 FY27 from 451.5 lakh units in FY26, while annualised utilisation declined to 71.9% from 85.0%. OBSC Perfection's combined hot and cold forging capacity was 12,000 tonnes per annum at about 35% annualised utilisation. These capacity additions, land advances and export-project procurement requirements provide the disclosed context for the half year's investment and working-capital use.

Conclusion

OBSC Perfection paired higher reported earnings with negative operating cash flow in H1 FY27. Revenue from operations reached Rs 169.41 crore and profit after tax reached Rs 21.83 crore, but current assets increased Rs 76.29 crore, led by receivables, inventories and short-term loans and advances. The resulting Rs 44.82 crore operating cash outflow, alongside Rs 26.05 crore of investing outflow, was financed by Rs 76.66 crore of net financing inflow.

The next disclosed milestone is the planned H2 FY27 ground-breaking for the Supa mega facility. Management's stated collection focus, the adjustment of supplier advances against future supplies, payable-day movement from 72 days, and utilisation of stamping capacity at 13% and forging capacity at about 35% are the disclosed measures to watch next.