RHI Magnesita working-capital days reach 133 in Q2 FY27

RHI Magnesita reported cash conversion days of 133 at September 2026, the end of Q2 FY27, as inventory rose to Rs 1,189 crore and 121 days. Receivable days fell to 90 from 105 in June 2026, but working capital increased to Rs 1,578 crore and net cash declined to Rs 136 crore.

Why did RHI Magnesita's cash conversion days reach 133?

RHI Magnesita's cash conversion days reached 133 at September 2026, up from 127 at June 2026 and 127 at September 2025. Working capital rose by Rs 111 crore sequentially to Rs 1,578 crore, while working-capital intensity increased to 38% from 36%.

The September 2026 measure was also above 120 days in December 2025 and 131 days in March 2026. Although working-capital intensity returned to the 38% recorded at September 2025, cash conversion days were six days higher than a year earlier, showing that the days measure changed despite the same reported intensity.

Working capital was Rs 16 crore above its September 2025 level, whereas the sequential increase from June 2026 was Rs 111 crore. The presentation does not provide a management explanation or a component-by-component bridge for the rise to 133 days, but it discloses movements in inventories, receivables and payables.

How did inventory affect RHI Magnesita's working capital?

Inventory was RHI Magnesita's largest disclosed working-capital component at Rs 1,189 crore in September 2026, up Rs 25 crore from June 2026 and Rs 87 crore from September 2025. Inventory days increased to 121 from 118 sequentially and from 106 a year earlier.

Inventory intensity was 29% in September 2026, unchanged from June 2026 and March 2026, compared with 27% in September 2025. The inventory balance was Rs 987 crore in December 2025, then rose to Rs 1,099 crore in March 2026, Rs 1,164 crore in June 2026 and Rs 1,189 crore in September 2026.

The inventory trend coincided with lower shipment. RHI Magnesita reported Q2 FY27 shipment of 118 kilotonnes, compared with 122 kilotonnes in Q1 FY27 and 141 kilotonnes in Q2 FY26, while revenue from operations was Rs 1,030 crore, versus Rs 1,014 crore and Rs 1,035 crore respectively. The presentation reports these movements but does not state that shipment caused the inventory increase.

Did lower receivable days offset RHI Magnesita's inventory build?

Lower receivable days did not offset the rise in RHI Magnesita's overall cash conversion days, which increased to 133 in September 2026. Receivable days fell by 15 days to 90 from 105 at June 2026 and were also below 93 days at September 2025.

Receivables increased by Rs 37 crore sequentially to Rs 1,038 crore, but remained below Rs 1,184 crore a year earlier. RHI Magnesita defines receivables as trade receivables plus contract assets less contract liabilities; receivables intensity was 25% in both June and September 2026, down from 29% in September 2025.

Payables declined to Rs 648 crore in September 2026 from Rs 698 crore in June 2026 and Rs 724 crore in September 2025. Payable days fell to 81 from 86 sequentially, though they remained above 75 a year earlier, and payable intensity declined to 16% from 17%.

Between June and September 2026, inventory days rose by three, receivable days declined by 15 and payable days declined by five, while cash conversion days rose by six. The presentation does not disclose the formula or a reconciliation linking each individual days measure to the 133-day total, so it does not support exact attribution of the movement.

What happened to RHI Magnesita's net cash in Q2 FY27?

RHI Magnesita ended Q2 FY27 with net cash of Rs 136 crore, down Rs 4 crore from Rs 140 crore at Q1 FY27. Net cash to earnings before interest, tax, depreciation and amortisation, or EBITDA, for the trailing four quarters declined to 0.25 times from 0.27 times.

The net-cash bridge adds Rs 139 crore of cash profit to the Q1 FY27 opening balance and records a Rs 91 crore working-capital outflow. It also includes Rs 27 crore of capital expenditure, Rs 30 crore of taxes paid, Rs 4 crore of other outflows and a Rs 10 crore proceed from Khemka in the joint venture, resulting in Rs 136 crore at Q2 FY27.

The Rs 91 crore working-capital outflow was larger than the Rs 30 crore tax payment and Rs 27 crore capital-expenditure outflow individually. It did not translate into an equivalent fall in net cash because the bridge also included Rs 139 crore of cash profit and the Rs 10 crore joint-venture proceed; the presentation does not identify the specific balance-sheet items behind the outflow.

Conclusion

RHI Magnesita's September 2026 disclosures show that a 15-day reduction in receivable days was accompanied by higher inventory and lower payables. Inventory reached Rs 1,189 crore and 121 days, payable days fell to 81, and the resulting reported cash conversion measure rose to 133 days, while net cash reduced to Rs 136 crore.

The next disclosures to watch are RHI Magnesita's supply-chain and operational digitisation programmes, process standardisation and automation, and cost actions including product transfers, recipe optimisation and plant-efficiency programmes. The presentation sets no target for inventory days, cash conversion days, working capital or net cash, leaving future quarterly reports to show whether these initiatives change the September 2026 levels.