Rustomjee H1FY27 cash flow falls 15% as net debt turns positive

Rustomjee’s operating cash flow fell 15% year on year to Rs 192.7 crore in H1FY27, while its balance sheet moved from net cash of Rs 63.5 crore at March 31, 2026 to net debt of Rs 132.4 crore at September 30, 2026, as project investment exceeded operating cash generated.

Why did Rustomjee’s operating cash flow fall in H1FY27?

Rustomjee’s operating cash flow (OCF) fell because project expenses increased faster than net collections during H1FY27. Net collections, including receipts from development-management (DM) and joint-venture (JV) projects, increased to Rs 872.1 crore from Rs 716.1 crore in H1FY26. However, project expenses rose to Rs 679.4 crore from Rs 488.9 crore, an increase of Rs 190.5 crore that was larger than the Rs 156 crore increase in collections.

The resulting OCF generated was Rs 192.7 crore in H1FY27, compared with Rs 227.2 crore in H1FY26. The second quarter improved sequentially: Q2FY27 OCF was Rs 124.9 crore, compared with Rs 67.8 crore in Q1FY27. Yet Q2FY27 OCF was only Rs 15.5 crore higher than the Rs 109.4 crore recorded in Q2FY26, despite quarterly net collections rising to Rs 418.9 crore from Rs 360 crore.

The comparison shows that collections grew in H1FY27, but project expenses absorbed more cash. Rustomjee reported revenue from operations of Rs 967 crore in H1FY27, up from Rs 772.4 crore in H1FY26, while OCF moved in the opposite direction. Revenue recognition and cash generated from operating activities therefore did not move at the same rate over the half year.

How much did Rustomjee invest and finance in H1FY27?

Rustomjee invested Rs 425.4 crore in projects in H1FY27, which was Rs 123.2 crore more than the Rs 302.2 crore invested in H1FY26. The company defines project investment as net of receipts from equity partners and says it includes land and approvals. That investment was more than twice the Rs 192.7 crore of OCF generated in the period, leaving a gap of Rs 232.7 crore before financing activities.

Financing activities supplied Rs 84.1 crore of cash in H1FY27, down from Rs 285.2 crore in H1FY26. Debt drawdown was Rs 442.2 crore, while repayments were Rs 319.6 crore, producing net borrowings before other financing items and finance costs of Rs 122.6 crore. In H1FY26, drawdown of Rs 551.1 crore and repayments of Rs 272.3 crore produced a larger net borrowing difference of Rs 278.8 crore.

Rustomjee ended H1FY27 with cash flows for the period of negative Rs 148.7 crore, against positive Rs 210.2 crore in H1FY26. The change reflected both a Rs 123.2 crore increase in project investment and a Rs 201.1 crore decline in financing cash flow. In Q2FY27 alone, financing cash flow was negative Rs 26.1 crore because Rs 259.7 crore of repayments exceeded Rs 249.6 crore of debt drawdown, before other items and finance costs.

Why did Rustomjee move from net cash to net debt?

Rustomjee moved to net debt because gross debt increased and cash and cash equivalents declined between March 31, 2026 and September 30, 2026. Gross debt rose by Rs 83 crore to Rs 837.8 crore, while cash and cash equivalents declined by Rs 112.9 crore to Rs 705.4 crore. Net debt consequently moved by Rs 195.9 crore, from net cash of Rs 63.5 crore to net debt of Rs 132.4 crore.

The debt movement occurred alongside an increase in equity to Rs 3,032.2 crore at September 30, 2026 from Rs 2,863.3 crore at March 31, 2026. Gross debt to equity was 0.28 at September 30, compared with 0.26 at March 31. Net debt to equity was 0.04 at September 30; the presentation shows no comparable net-debt-to-equity ratio for March because Rustomjee then had net cash.

Rustomjee also reported debt in JV companies, based on its KRL share, of Rs 117.7 crore at September 30, up from Rs 80 crore at March 31. Its average cost of borrowing was 9.2% per annum, which management said was 269 basis points lower than three years earlier. The presentation lists AA- with stable outlook ratings from CRISIL Ratings in May 2026 and ICRA in June 2026 for loans taken by the company.

What do Rustomjee’s launches and collections indicate for cash generation?

Rustomjee’s collection data indicate that cash conversion differs by project launch period, particularly for newer launches. For projects launched in FY24, 72% of gross development value (GDV) had been sold by Q2FY27 and collections equalled 60% of GDV sold. For projects launched in H1FY27, 33% of GDV had been sold but collections were 8% of GDV sold, reflecting the earlier collection stage of those projects.

The intermediate cohorts also show different conversion levels: FY25 launches had sold 61% of GDV and collected 37% of GDV sold, while FY26 launches had sold 27% and collected 17%. These measures do not state future cash flow, but they identify the collection mechanism relevant to operating cash generation. Newer projects can add sold value before a similar proportion of cash has been collected.

Rustomjee had launched 26 projects from FY23 through year to date FY27, with cumulative GDV of Rs 20,900 crore. H1FY27 launches carried GDV of Rs 2,240 crore. The presentation estimates FY27 launch GDV of about Rs 8,000 crore across eight listed projects with combined saleable area of 5.18 million square feet, including Urban Woods in Dombivli, Avinash Tower in Versova and GTB Nagar Phase 1 in Sion.

Conclusion

Rustomjee’s H1FY27 figures show that higher collections and higher reported operating revenue did not prevent a 15% OCF decline, because project expenses rose faster and project investment reached Rs 425.4 crore. The combination of negative Rs 148.7 crore cash flow for the period, lower financing inflow and reduced cash balances coincided with the move from Rs 63.5 crore of net cash to Rs 132.4 crore of net debt.

The next measure to watch is collection conversion from Rustomjee’s newer launches against its FY27 launch plan of about Rs 8,000 crore of GDV. The pipeline covers 5.18 million square feet across eight listed projects, while H1FY27 launches had collected 8% of GDV sold by Q2FY27. The pace at which those sales translate into collections, alongside project investment and debt drawdown, will be relevant to the next cash-flow movement.