PRIMECAB H1 operating cash outflow reaches Rs 18.7 crore

In the first half (H1) of FY27, Prime Cable (PRIMECAB) reported a Rs 18.7 crore net operating cash outflow, as working-capital changes used Rs 31.9 crore despite profit after tax rising 73% year on year to Rs 9.5 crore. The cash use coincided with higher inventories, receivables, capital expenditure and borrowings.

Why did PRIMECAB report an operating cash outflow in H1 FY27?

PRIMECAB reported a Rs 18.7 crore operating cash outflow in H1 FY27 because working-capital changes used Rs 31.9 crore, exceeding the cash generated before that movement. Profit before tax was Rs 12.9 crore and non-cash and non-operating adjustments added Rs 3.3 crore, while direct taxes paid used a further Rs 3.0 crore.

The H1 FY27 outflow was Rs 5.6 crore greater than the Rs 13.1 crore outflow reported for full-year FY26, although the periods are not directly comparable. The presentation does not provide H1 FY26 cash-flow data, but it shows operating cash flow moved from a Rs 3.4 crore inflow in FY25 to a Rs 13.1 crore outflow in FY26.

How did PRIMECAB's inventory and receivables change?

PRIMECAB's inventories and trade receivables rose by a combined Rs 28.1 crore from FY26 to H1 FY27. Inventories increased Rs 23.8 crore to Rs 63.2 crore, while trade receivables increased Rs 4.3 crore to Rs 74.8 crore during the period containing the Rs 31.9 crore working-capital cash use.

Trade payables rose Rs 4.2 crore to Rs 42.7 crore, which was less than the combined increase in inventory and receivables. Total current assets increased Rs 22.8 crore to Rs 148.3 crore, while cash and cash equivalents on the balance sheet fell Rs 8.7 crore to Rs 4.2 crore.

How did PRIMECAB fund its operating and investment cash needs?

PRIMECAB generated Rs 21.1 crore of net financing cash inflow in H1 FY27, comprising Rs 23.9 crore of proceeds less repayments of borrowings and Rs 2.8 crore of interest and lease payments. This inflow was smaller than the combined Rs 30.1 crore operating and investing cash outflow, resulting in a Rs 9.1 crore net decrease in cash in the cash-flow statement.

Investing activities used Rs 11.4 crore in H1 FY27, including Rs 11.2 crore of net fixed-asset purchases and Rs 0.4 crore of net investment purchases. Fixed-asset purchases were below Rs 19.3 crore in FY26, although H1 FY27 covers six months, and capital work-in-progress rose Rs 6.9 crore to Rs 7.9 crore.

Did PRIMECAB's H1 FY27 profit growth convert into operating cash?

PRIMECAB's higher reported profit did not translate into positive operating cash in H1 FY27 because of the Rs 31.9 crore working-capital cash use. Revenue from operations rose 117% year on year to Rs 196.4 crore, while profit after tax increased 73% to Rs 9.5 crore and operating cash flow was negative Rs 18.7 crore.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 68% to Rs 16.5 crore, but EBITDA margin declined to 8.4% from 10.8%. Profit-after-tax margin declined to 4.8% from 6.0%, while material and service costs rose 126% to Rs 171.5 crore, compared with the 117% increase in revenue.

What do PRIMECAB's annual operating metrics show?

PRIMECAB's annual collection and cash-cycle measures had lengthened in FY26 before the H1 FY27 working-capital outflow. Debtor days increased to 85 in FY26 from 65 in FY25, while the cash conversion cycle increased to 81 days from 73 days.

Inventory days moved in the other direction, declining to 62 in FY26 from 68 in FY25. The presentation does not disclose H1 FY27 debtor days, inventory days or cash conversion cycle, so it does not show whether the H1 inventory increase to Rs 63.2 crore changed those operating measures.

What changed in PRIMECAB's borrowing and funding mix?

PRIMECAB's total borrowings increased Rs 24.0 crore from Rs 51.5 crore at FY26 to Rs 75.5 crore at H1 FY27. Current borrowings rose Rs 15.9 crore to Rs 56.9 crore, while non-current borrowings rose Rs 8.1 crore to Rs 18.6 crore.

Total assets increased Rs 33.4 crore to Rs 198.4 crore and shareholders' equity increased Rs 9.5 crore to Rs 70.3 crore between FY26 and H1 FY27. Total liabilities rose Rs 24.0 crore to Rs 128.2 crore, while the cash-flow statement recorded Rs 23.9 crore of proceeds less repayments of borrowings.

Conclusion

PRIMECAB's H1 FY27 results show that accounting earnings and cash generation moved in different directions: profit after tax rose 73% to Rs 9.5 crore, but working-capital changes of Rs 31.9 crore resulted in a Rs 18.7 crore operating cash outflow. Inventory, receivables, fixed-asset purchases and borrowings all increased during the period.

The next point to watch is whether PRIMECAB discloses changes in H1 FY27 collection days, inventory days and cash conversion cycle, which are not provided in the presentation. The presentation also does not explain why its H1 FY27 cash-flow statement shows closing cash of Rs 0.8 crore while its balance sheet reports cash and cash equivalents of Rs 4.2 crore.