Popular Vehicles reports Rs 178.657 crore operating outflow

Popular Vehicles and Services Limited reported net cash used in operating activities of Rs 178.657 crore for the six months ended 30 September 2026, against Rs 11.419 crore used a year earlier, as inventory absorbed Rs 302.267 crore of cash. The group nevertheless reported consolidated profit of Rs 3.570 crore for the period.

Why did Popular Vehicles report an operating cash outflow?

Popular Vehicles reported an operating cash outflow because working-capital demands exceeded the Rs 138.573 crore generated before those movements in the six months ended 30 September 2026. That pre-working-capital cash generation rose from Rs 83.264 crore in the corresponding 2025 period, supported by Rs 80.906 crore of depreciation and amortisation and Rs 62.731 crore of finance costs added back under the indirect cash-flow method.

Inventory was the largest working-capital use, absorbing Rs 302.267 crore compared with Rs 129.975 crore a year earlier. Trade receivables used Rs 44.628 crore, up from Rs 15.606 crore, while loans, other financial assets and other assets used Rs 25.463 crore, against Rs 85.342 crore in the prior-year period. Higher liabilities and provisions supplied Rs 58.610 crore, less than the Rs 148.558 crore contribution a year before.

These movements turned cash generated from operations before tax into an outflow of Rs 175.175 crore, compared with an inflow of Rs 0.899 crore in the six months ended 30 September 2025. Net income taxes paid were Rs 3.482 crore, down from Rs 12.318 crore, resulting in the reported operating cash outflow of Rs 178.657 crore. The statement uses the indirect method prescribed by Indian Accounting Standard 7, or Ind AS 7, Statement of Cash Flows.

How much did Popular Vehicles' inventory rise?

Popular Vehicles' inventory rose by Rs 302.887 crore on the balance sheet between 31 March 2026 and 30 September 2026. Inventories stood at Rs 920.259 crore at the September reporting date, compared with Rs 617.372 crore at 31 March 2026. The Rs 302.267 crore inventory movement in the cash-flow statement differs slightly because it measures the cash-flow effect rather than the closing balance movement.

The higher inventory coincided with an expansion in first-half revenue from operations to Rs 3,983.890 crore from Rs 2,851.210 crore a year earlier. Purchases of stock-in-trade increased to Rs 3,781.188 crore from Rs 2,554.753 crore, while the income statement's change in inventories was Rs 302.887 crore, compared with Rs 101.072 crore in the prior-year half.

All four disclosed segments recorded higher revenue. Passenger cars excluding luxury vehicles generated Rs 1,968.355 crore, commercial vehicles generated Rs 1,351.900 crore, luxury vehicles generated Rs 407.371 crore and others generated Rs 256.264 crore. Passenger cars excluding luxury vehicles remained the largest revenue segment, while commercial vehicles reported the largest segment profit before income tax at Rs 38.686 crore.

How did Popular Vehicles fund its cash requirements?

Popular Vehicles funded part of its cash requirements through Rs 315.777 crore of net new borrowing during the six months ended 30 September 2026. Long-term borrowing proceeds were Rs 105.603 crore and repayments were Rs 16.369 crore, leaving net long-term proceeds of Rs 89.234 crore. Net short-term borrowings availed were Rs 226.543 crore, compared with Rs 125.027 crore in the corresponding period of 2025.

Net cash generated from financing activities was Rs 225.769 crore, up from Rs 58.451 crore a year earlier. The financing cash flow included Rs 32.983 crore of finance costs paid, Rs 29.748 crore of interest on lease liabilities and Rs 26.472 crore of lease principal payments. Financing inflows did not fully cover the combined operating outflow of Rs 178.657 crore and investing outflow of Rs 84.706 crore.

Total borrowings were Rs 1,011.847 crore at 30 September 2026, compared with Rs 696.070 crore at 31 March 2026. Current borrowings increased to Rs 883.681 crore from Rs 648.546 crore, and non-current borrowings rose to Rs 128.166 crore from Rs 47.524 crore. Finance costs for the six months increased to Rs 62.731 crore from Rs 48.462 crore.

What happened to Popular Vehicles' cash and investing expenditure?

Popular Vehicles' cash and cash equivalents fell by Rs 37.594 crore during the six months ended 30 September 2026, closing at Rs 26.733 crore. The cash-flow statement records restated opening cash and cash equivalents of Rs 64.327 crore, following an amendment to Ind AS 109, Financial Instruments. The balance sheet also showed Rs 11.591 crore of bank balances other than cash equivalents at 30 September 2026.

Net cash used in investing activities increased to Rs 84.706 crore from Rs 23.290 crore in the prior-year half. Payments for a business acquisition were Rs 29.045 crore, while acquisition of property, plant and equipment including capital advances used Rs 51.541 crore. Net purchases of investments used Rs 4.503 crore, intangible-asset acquisition used Rs 3.053 crore, and property sales generated Rs 3.011 crore.

The prior-year investing cash flow included Rs 70 crore of proceeds from sale of subsidiaries, which did not recur in the 2026 half-year. Popular Vehicles completed the 2025 disinvestment of Kuttukaran Green Private Limited and Vision Motors Private Limited for combined consideration of Rs 70 crore. The group recorded a Rs 15.287 crore gain from those disposals in the year ended 31 March 2026.

Did Popular Vehicles remain profitable during the cash outflow?

Popular Vehicles remained profitable, reporting consolidated profit of Rs 3.570 crore for the six months ended 30 September 2026, compared with a loss of Rs 8.190 crore in the corresponding 2025 period. Profit before tax and exceptional items was Rs 6.136 crore, reversing a Rs 14.740 crore loss before tax and exceptional items a year earlier. The half-year tax charge was Rs 2.566 crore, comprising current tax of Rs 11.451 crore and a deferred-tax credit of Rs 8.885 crore.

Aggregate segment profit before income tax increased to Rs 70.139 crore from Rs 34.994 crore. Commercial vehicles contributed Rs 38.686 crore, passenger cars excluding luxury vehicles contributed Rs 21.664 crore, luxury vehicles contributed Rs 12.708 crore, and others recorded a Rs 2.919 crore loss. Finance costs of Rs 62.731 crore and unallocated net expenses of Rs 1.272 crore reduced aggregate segment profit to the reported profit before tax and exceptional items.

Conclusion

Popular Vehicles generated more cash before working-capital movements and returned to first-half consolidated profit, but higher inventory, receivables and other asset balances produced a Rs 178.657 crore operating cash outflow. Borrowings rose by Rs 315.777 crore and financing activity generated Rs 225.769 crore, while cash and cash equivalents ended the period at Rs 26.733 crore.

The next disclosed matter to watch is the conversion of the Rs 920.259 crore inventory balance and higher receivables into operating cash, alongside changes in borrowings and finance costs. Popular Vehicles also said it continues to monitor final Central and State Rules and government clarifications on the Labour Codes, and would record accounting effects as developments require.