R K SWAMY Limited first-half operating cash flow turns negative

R K SWAMY reported a Rs 17.84 crore operating cash outflow for the six months ended September 30, 2026, despite consolidated profit rising 34% year on year to Rs 4.57 crore. A Rs 19.24 crore fall in trade payables, a Rs 7.42 crore receivables outflow and Rs 13.23 crore of net tax paid drove the reversal.

Why did R K SWAMY report negative operating cash flow?

R K SWAMY used Rs 17.84 crore in operating activities in the six months ended September 30, 2026, compared with Rs 2.53 crore generated in the corresponding 2025 period. This occurred even as operating profit before working-capital changes rose to Rs 17.41 crore from Rs 13.25 crore. The company prepared its cash-flow statement using the indirect method under Indian Accounting Standard 7, or Ind AS 7.

Trade payables were the largest working-capital cash movement, falling by Rs 19.24 crore compared with a Rs 5.13 crore fall a year earlier. Trade receivables used Rs 7.42 crore of cash, whereas they released Rs 4.66 crore in the prior-year first half. Other non-current and current financial assets released Rs 8.86 crore, but cash used in operations was still Rs 4.60 crore, against Rs 11.56 crore generated a year earlier.

Net income tax paid increased to Rs 13.23 crore from Rs 9.03 crore. That payment took the operating cash result from a Rs 4.60 crore outflow before tax to a Rs 17.84 crore outflow after tax. Operating cash flow includes working-capital and tax movements that are not reflected in reported profit alone.

How did R K SWAMY's first-half earnings change?

R K SWAMY's consolidated profit increased to Rs 4.57 crore for the six months ended September 30, 2026 from Rs 3.41 crore a year earlier. Revenue from operations rose to Rs 168.15 crore from Rs 151.22 crore, and total income increased to Rs 172.43 crore from Rs 156.63 crore. R K SWAMY reports one operating segment, Integrated Marketing Services.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose to Rs 21.23 crore from Rs 17.47 crore. Operational expense increased to Rs 57.11 crore from Rs 46.67 crore, while other expenses rose to Rs 35.31 crore from Rs 30.52 crore. Employee benefits expense declined to Rs 58.78 crore from Rs 61.98 crore.

Profit before tax was Rs 8.49 crore, compared with Rs 6.73 crore, while total tax expense rose to Rs 3.92 crore from Rs 3.32 crore. Basic and diluted earnings per share, not annualised, were Rs 0.91, against Rs 0.68 in the corresponding period. R K SWAMY said its results are not evenly distributed across the year because of the nature of the business and past trends.

What changed in R K SWAMY's September-quarter results?

R K SWAMY reported September-quarter revenue from operations of Rs 84.53 crore and consolidated profit of Rs 1.11 crore, compared with Rs 73.65 crore and Rs 0.54 crore respectively in the September 2025 quarter. Total income rose to Rs 86.62 crore from Rs 76.38 crore. Operational expense increased to Rs 29.98 crore from Rs 21.72 crore.

Profit declined sequentially from Rs 3.47 crore in the June 2026 quarter, although September revenue was slightly above June's Rs 83.62 crore. September EBITDA was Rs 10.31 crore, below Rs 10.92 crore in June. Tax expense was Rs 2.84 crore in September, compared with Rs 1.08 crore in June, while profit before tax declined to Rs 3.95 crore from Rs 4.55 crore.

Total comprehensive income was Rs 0.58 crore in the September quarter, compared with Rs 3.48 crore in June and Rs 0.66 crore in the September 2025 quarter. The September result included Rs 0.53 crore of other comprehensive loss, including a Rs 0.76 crore remeasurement loss on defined-benefit plans. Related tax of Rs 0.19 crore and a Rs 0.04 crore foreign-operation translation gain partly offset that loss.

Which balance-sheet changes affected R K SWAMY's working capital?

R K SWAMY's trade receivables rose to Rs 134.14 crore at September 30, 2026 from Rs 126.37 crore at March 31, 2026. This balance-sheet movement aligns with the Rs 7.42 crore cash outflow from receivables in the cash-flow statement. Cash and cash equivalents fell to Rs 18.28 crore from Rs 35.74 crore, while bank balances other than cash equivalents declined to Rs 87.07 crore from Rs 100.13 crore.

Trade payables to creditors other than micro and small enterprises decreased to Rs 64.71 crore from Rs 83.50 crore. Payables to micro and small enterprises also fell to Rs 2.11 crore from Rs 2.62 crore. Other financial liabilities declined to Rs 12.78 crore from Rs 18.30 crore, contributing to the Rs 5.50 crore outflow reported under other non-current and current financial liabilities.

Total current assets were Rs 303.32 crore at September 30, compared with Rs 337.77 crore at March 31, and total current liabilities declined to Rs 104.38 crore from Rs 127.11 crore. Non-current tax assets rose to Rs 19.15 crore from Rs 9.69 crore. Total equity was Rs 258.25 crore, compared with Rs 264.28 crore at the preceding year-end.

How did investing and financing flows change R K SWAMY's cash balance?

R K SWAMY generated Rs 19.20 crore from investing activities in the first half, compared with Rs 5.03 crore a year earlier. Bank-deposit maturities generated Rs 70.52 crore, exceeding Rs 52.46 crore placed in deposits. Capital expenditure on property, plant and equipment, including intangible assets, capital advances and capital work in progress, was Rs 1.14 crore, down from Rs 2.90 crore.

Financing activities used Rs 18.84 crore, compared with Rs 14.98 crore in the corresponding 2025 period. Dividend payments increased to Rs 10.10 crore from Rs 7.57 crore, and lease-liability payments rose to Rs 8.74 crore from Rs 7.41 crore. Combined operating, investing and financing flows reduced cash and cash equivalents by Rs 17.48 crore before a favourable Rs 2.39 lakh exchange effect.

Conclusion

R K SWAMY's first-half results combined higher revenue, EBITDA and post-tax profit with a reversal in cash generation. Revenue reached Rs 168.15 crore, EBITDA was Rs 21.23 crore and profit was Rs 4.57 crore, but changes in payables, receivables and tax payments resulted in a Rs 17.84 crore operating cash outflow.

The disclosed use of remaining initial public offering proceeds is a further item to watch. At September 30, 2026, R K SWAMY had Rs 42.85 crore unutilised, including Rs 18.81 crore allocated to information-technology infrastructure and Rs 13.05 crore for new customer engagement centre and computer-assisted telephone interview facilities.