Power & Instrumentation (Gujarat) reports H1 cash outflow

Power & Instrumentation (Gujarat) Limited recorded a standalone operating cash outflow of Rs 86.31 lakh for the half year ended 30 September 2026, compared with a Rs 13.68 crore inflow a year earlier, despite profit before tax rising to Rs 10.53 crore from Rs 9.56 crore. Higher other financial assets and other current assets absorbed cash.

Why did Power & Instrumentation (Gujarat)'s operating cash flow turn negative?

Power & Instrumentation (Gujarat)'s operating cash flow turned negative because working-capital changes reduced cash generated from operations to Rs 1.09 crore in the half year ended 30 September 2026, from Rs 14.00 crore in the corresponding 2025 period. Income taxes paid of Rs 1.96 crore then took net operating cash flow to an outflow of Rs 86.31 lakh.

Operating profit before working-capital changes increased to Rs 13.03 crore from Rs 10.83 crore. However, other financial assets, comprising security deposits, retention and other items in the cash-flow statement, used Rs 17.47 crore, against a Rs 3.55 crore cash release a year earlier. Other current assets used a further Rs 7.43 crore, compared with a Rs 2.29 crore release in the previous half year.

These two asset movements represented a Rs 30.74 crore year-on-year deterioration before tax payments. Inventories also used Rs 4.50 crore in the six months to 30 September 2026, compared with Rs 4.16 crore in the prior-year period, while trade receivables released Rs 1.48 crore, below the earlier Rs 2.47 crore release.

How did Power & Instrumentation (Gujarat)'s profit rise while cash declined?

Power & Instrumentation (Gujarat)'s reported profit rose because revenue and the pre-tax result increased, while cash flow was reduced by asset and liability movements. Revenue from operations was Rs 110.28 crore for the half year ended 30 September 2026, versus Rs 109.17 crore a year earlier, and standalone net profit increased to Rs 8.16 crore from Rs 7.10 crore.

The results include Rs 3.10 crore of revenue from a price-variation claim under a contract with Ajmer Vidyut Vitran Nigam Limited. The customer approved the claim by a 6 October 2026 letter, received after the 30 September 2026 reporting date but before board approval of the results on 7 November 2026. Power & Instrumentation (Gujarat) recorded the amount as unbilled revenue.

Power & Instrumentation (Gujarat) treated the price variation as variable consideration under Indian Accounting Standard 115, or Ind AS 115, and the approval as an adjusting event under Ind AS 10. The filing identifies Electrical Contracting as its only operating segment, so it does not provide a segment-level split of the Rs 86.31 lakh operating cash outflow.

Which liabilities partly offset Power & Instrumentation (Gujarat)'s asset outflows?

Power & Instrumentation (Gujarat) partly offset the asset-related cash use through higher trade payables and other liabilities during the half year ended 30 September 2026. Trade payables generated Rs 9.13 crore of cash, compared with a Rs 3.45 crore cash use in the corresponding 2025 half year.

Other financial liabilities generated Rs 4.01 crore, versus a Rs 13.62 lakh outflow a year earlier, while other current liabilities generated Rs 2.76 crore against Rs 4.47 crore previously. Provisions added Rs 5.27 lakh of cash, compared with a Rs 1.86 crore use in the prior-year period, but these liability movements did not fully offset the Rs 24.90 crore combined outflow in other financial assets and other current assets.

The 30 September 2026 balance sheet showed other financial assets of Rs 70.98 crore, up from Rs 56.87 crore at 31 March 2026. Other current assets rose to Rs 42.25 crore from Rs 34.82 crore, while inventories increased to Rs 70.35 crore from Rs 65.85 crore over the same six-month interval.

What happened to Power & Instrumentation (Gujarat)'s total cash flows?

Power & Instrumentation (Gujarat)'s cash and cash equivalents fell by Rs 2.72 crore during the half year ended 30 September 2026 to Rs 80.80 lakh, from Rs 3.53 crore at the start of the period. The Rs 86.31 lakh operating outflow and a Rs 2.83 crore investing outflow were only partly offset by Rs 96.79 lakh from financing activities.

Investing activities included Rs 87.95 lakh spent on property, plant and equipment, intangibles and capital work-in-progress, compared with Rs 37.69 lakh in the prior-year half. Net bank deposits placed used Rs 1.88 crore, net mutual-fund purchases used Rs 42.50 lakh, and interest received was Rs 33.83 lakh.

Financing cash flow included net borrowing proceeds of Rs 3.72 crore, compared with Rs 3.32 crore a year earlier. Interest and other finance costs paid rose to Rs 2.65 crore from Rs 1.46 crore, and lease-liability payments were Rs 10.98 lakh. Current borrowings stood at Rs 22.42 crore on 30 September 2026, versus Rs 18.13 crore on 31 March 2026, while non-current borrowings declined to Rs 4.66 crore from Rs 5.23 crore.

What qualifications apply to Power & Instrumentation (Gujarat)'s figures?

Power & Instrumentation (Gujarat)'s standalone results for the quarter and half year ended 30 September 2026 were unaudited and subject to a limited review. The reviewer stated that nothing had come to its attention indicating a material misstatement, but did not issue an audit opinion because a review provides less assurance than an audit.

The reviewer also drew attention to inventory held at various locations, saying its final value was calculated and certified by management because of its technical nature, types, sizes and grades. The reviewer said it could not cross-confirm the inventory value, which Power & Instrumentation (Gujarat) reported at Rs 70.35 crore on 30 September 2026.

Conclusion

The half-year statement shows that Power & Instrumentation (Gujarat)'s higher reported earnings did not translate into positive operating cash flow. Profit before tax increased by Rs 97.27 lakh to Rs 10.53 crore, but a Rs 17.47 crore outflow in other financial assets, a Rs 7.43 crore outflow in other current assets and Rs 1.96 crore of taxes paid resulted in a Rs 86.31 lakh operating cash outflow.

The disclosed unresolved matter to watch is the finalisation of Central and State rules and government clarifications on the Labour Codes. Power & Instrumentation (Gujarat) said it will provide an appropriate accounting effect if required by subsequent developments; it had recognised a Rs 4.57 lakh incremental gratuity impact as an exceptional item for the year ended 31 March 2026.