Ravita H1 operating cash flow remained negative at Rs 7.42 crore

Ravita Engineering Services Limited reported Rs 20.51 crore of profit after tax in H1 FY27, yet net cash from operating activities was negative Rs 7.42 crore because working-capital changes consumed Rs 35.06 crore. Revenue rose 72.1% year on year to Rs 198.44 crore, while the operating cash deficit narrowed from negative Rs 41.39 crore.

What caused Ravita’s negative operating cash flow in H1 FY27?

Ravita’s operating cash flow was negative because its Rs 35.06 crore working-capital outflow exceeded Rs 28.89 crore of operating profit before working-capital changes. Profit before tax was Rs 27.41 crore and adjustments for non-operating items added Rs 1.47 crore. Cash used in operations was therefore Rs 6.17 crore before direct taxes paid of Rs 1.25 crore, resulting in negative net operating cash flow of Rs 7.42 crore.

The cash result differed from reported earnings because the income statement recorded profit during H1 FY27 while the cash-flow statement included funding absorbed by working capital. Revenue from operations increased by Rs 83.12 crore from Rs 115.32 crore in H1 FY26, and profit after tax increased by Rs 6.44 crore from Rs 14.07 crore. The presentation identifies the working-capital movement only as an aggregate, rather than providing a cash-flow reconciliation for individual balance-sheet accounts.

Cash use from working capital was lower than in the previous comparable half-year, but still exceeded the pre-working-capital operating profit. Working-capital changes used Rs 61.14 crore in H1 FY26, compared with Rs 35.06 crore in H1 FY27, reducing cash use by Rs 26.08 crore. Net cash used in operating activities consequently narrowed by Rs 33.97 crore from negative Rs 41.39 crore.

Which working-capital accounts increased in H1 FY27?

Ravita’s trade receivables and inventories increased between March 2026 and September 2026. Trade receivables rose by Rs 32.21 crore to Rs 105.47 crore, while inventories rose by Rs 17.01 crore to Rs 54.44 crore. Short-term loans and advances increased by Rs 1.84 crore to Rs 35.60 crore, and other current assets increased by Rs 2.64 crore to Rs 5.83 crore.

Ravita’s current liabilities increased as well, partly offsetting the rise in current assets. Trade payables due to others increased by Rs 13.36 crore to Rs 45.93 crore, other current liabilities rose by Rs 5.23 crore to Rs 13.16 crore, and short-term provisions increased by Rs 5.73 crore to Rs 8.66 crore. Total current liabilities rose Rs 33.87 crore to Rs 96.36 crore, compared with a Rs 56.66 crore increase in current assets.

These balance-sheet movements are consistent with more funds being tied up in operating assets, but they do not fully explain the Rs 35.06 crore working-capital line. The cash-flow statement covers H1 FY27, while the balance sheet compares positions at 30 September 2026 and March 2026. Ravita does not disclose the separate cash-flow effect of receivables, inventories, payables or advances.

How did Ravita fund its H1 FY27 cash outflows?

Ravita reported Rs 10.54 crore of cash inflow from financing activities in H1 FY27, exceeding the combined negative Rs 7.42 crore operating cash flow and negative Rs 15 lakh investing cash flow. Net cash and cash equivalents therefore increased by Rs 2.97 crore during the half year. Cash and bank balances increased by the same Rs 2.97 crore, from Rs 5.15 crore in March 2026 to Rs 8.12 crore in September 2026.

Borrowings were higher at 30 September 2026. Short-term borrowings rose by Rs 9.56 crore to Rs 28.61 crore, while long-term borrowings increased by Rs 1.71 crore to Rs 1.87 crore. Total borrowings therefore increased by Rs 11.27 crore to Rs 30.48 crore from Rs 19.21 crore, although Ravita does not break down the Rs 10.54 crore financing cash inflow into borrowings, equity or other components.

Financing cash inflow was lower than in H1 FY26, when Ravita reported Rs 43.41 crore from financing activities. The H1 FY27 inflow was Rs 32.87 crore lower, but net cash increased by Rs 2.97 crore versus Rs 1.47 crore in H1 FY26. The narrower operating cash deficit of Rs 7.42 crore, against Rs 41.39 crore a year earlier, accounts for that difference in the cash bridge.

How did Ravita’s earnings growth compare with cash generation?

Ravita increased earnings in H1 FY27, while profit margins declined and operating cash flow remained negative. Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased to Rs 28.71 crore from Rs 20.13 crore. EBITDA margin declined to 14.47% from 17.45%, and profit after tax margin declined to 10.34% from 12.20%.

The comparison with H2 FY26 also shows higher activity in H1 FY27. Revenue was Rs 198.44 crore in H1 FY27, Rs 36.12 crore above Rs 162.32 crore in H2 FY26, and profit after tax was Rs 6.54 crore higher than Rs 13.97 crore. Ravita does not provide H2 FY26 cash-flow figures, so the presentation does not support a half-on-half comparison of operating cash generation.

The September 2026 balance sheet excludes a subsequent capital event. Ravita states that initial public offering proceeds received in October 2026 are not reflected in the 30 September 2026 balance sheet. The company was listed on NSE EMERGE on 22 October 2026, after the balance-sheet and H1 FY27 cash-flow reporting date.

Conclusion

Ravita’s H1 FY27 earnings growth did not translate into positive operating cash generation. A Rs 35.06 crore working-capital outflow outweighed Rs 28.89 crore of operating profit before working-capital changes, while receivables and inventories rose by Rs 32.21 crore and Rs 17.01 crore, respectively, between March and September 2026.

The disclosed unresolved matter is the effect of October 2026 initial public offering proceeds, which are absent from the September balance sheet. Subsequent disclosures can show how those proceeds affected cash, borrowings and working-capital funding as Ravita executes the Rs 411.84 crore order book reported at 30 September 2026.