Sandhar operating cash rises to Rs 168.54 crore, yet cash falls

Sandhar Technologies Limited generated net operating cash of Rs 168.54 crore in the six months ended 30 September 2026, up from Rs 94.77 crore a year earlier, but Rs 188.86 crore of net investing outflow exceeded that cash generation and reduced cash and cash equivalents to Rs 25.27 crore from Rs 51.09 crore at 31 March 2026.

How much operating cash did Sandhar generate?

Sandhar generated Rs 168.54 crore of net cash from operating activities for the six months ended 30 September 2026, an increase of Rs 73.77 crore from Rs 94.77 crore in the corresponding 2025 period. Cash generated from operations before tax payments rose to Rs 198.72 crore from Rs 119.30 crore, while net income-tax paid increased to Rs 30.18 crore from Rs 24.53 crore.

The improvement began with operating profit before working-capital changes, which reached Rs 259.14 crore against Rs 206.94 crore a year earlier. Profit before tax was slightly lower at Rs 125.45 crore versus Rs 131.99 crore, but depreciation and amortisation increased to Rs 101.92 crore from Rs 93.90 crore, contributing to the higher pre-working-capital cash measure. Finance costs were Rs 35.84 crore, compared with Rs 34.59 crore in the prior-year period.

Sandhar prepared the consolidated statement using the indirect method under Indian Accounting Standard 7, or Ind AS 7, Statement of Cash Flows. That method starts with profit before tax and adjusts it for non-cash charges, investment-related gains and working-capital movements, so the Rs 168.54 crore figure is distinct from the Rs 94.32 crore consolidated total comprehensive income reported for the same six-month period.

What drove Sandhar's working-capital cash movement?

Sandhar reported a Rs 60.42 crore positive total movement in working capital in the six months ended 30 September 2026, compared with a Rs 87.64 crore positive movement a year earlier. The positive outcome arose despite cash being tied up in receivables, inventories and other current assets, because increases in trade payables and other liabilities were larger in aggregate.

Trade receivables increased by Rs 163.72 crore and inventories increased by Rs 98.07 crore, representing cash outflows. Other current assets rose by Rs 43.41 crore, current financial assets increased by Rs 21.65 crore and non-current financial assets increased by Rs 5.44 crore. These movements show that part of the period's operating cash generation was committed to current operating assets.

The principal offset was a Rs 237.07 crore increase in trade payables. Other financial liabilities rose by Rs 27.46 crore and other current liabilities increased by Rs 31.47 crore, while current provisions declined by Rs 24.13 crore. Compared with the year-earlier period, the cash outflow from receivables narrowed from Rs 262.18 crore, but the cash contribution from total working-capital movement also declined by Rs 27.22 crore.

Why did Sandhar's investing cash flow increase?

Sandhar used Rs 188.86 crore in investing activities in the six months ended 30 September 2026, compared with Rs 79.35 crore used in the prior-year period. The main use was Rs 191.05 crore spent on property, plant and equipment, capital work-in-progress, other intangible assets and business, exceeding the Rs 168.54 crore generated from operations by Rs 22.51 crore.

The investment outflow included Rs 28.89 crore of changes in bank deposits, while interest received was Rs 1.74 crore. Proceeds from the sale of property, plant and equipment were Rs 29.34 crore, substantially below Rs 81.36 crore in the comparable six months. The prior-year investing activities also included Rs 7.80 crore of proceeds from divestment in a joint venture, an item not reported for the 2026 period.

The balance sheet records the effect of ongoing asset additions. Capital work-in-progress rose to Rs 181.92 crore at 30 September 2026 from Rs 100.41 crore at 31 March 2026, while property, plant and equipment increased to Rs 1,299.52 crore from Rs 1,285.86 crore. Total non-current assets increased by Rs 91.10 crore to Rs 2,023.66 crore, consistent with the period's investment activity.

How did investment spending affect Sandhar's cash and borrowings?

Sandhar's cash and cash equivalents fell by Rs 25.82 crore during the six months to Rs 25.27 crore, after a Rs 21.20 crore net decrease before the Rs 4.62 crore adverse effect of foreign-currency translation. The cash-flow statement starts with Rs 51.09 crore of cash and cash equivalents at the beginning of the period and reports Rs 25.27 crore at the end.

Financing activities produced a reported Rs 0.88 crore net cash outflow during the period. Sandhar repaid Rs 72.59 crore of long-term borrowings and raised Rs 38.39 crore of long-term borrowings, while net proceeds from short-term borrowings were Rs 85.22 crore. Lease-liability payments were Rs 16.93 crore and interest paid on lease liabilities was Rs 4.39 crore.

On the consolidated balance sheet, current borrowings rose to Rs 743.72 crore at 30 September 2026 from Rs 683.12 crore at 31 March 2026. Non-current borrowings moved in the other direction, declining to Rs 255.45 crore from Rs 265.03 crore. The balance-sheet shift accompanies the cash-flow statement's net short-term borrowing proceeds and the period's Rs 191.05 crore acquisition spending.

Conclusion

Sandhar's six-month cash flow shows higher operational cash generation, with net operating cash rising to Rs 168.54 crore from Rs 94.77 crore. However, working-capital uses included Rs 163.72 crore for higher receivables and Rs 98.07 crore for inventories, while Rs 191.05 crore of asset and business acquisitions led to a Rs 188.86 crore net investing outflow and a lower cash balance.

The next disclosed balance-sheet indicators to watch are capital work-in-progress, which stood at Rs 181.92 crore at 30 September 2026, and the mix of current and non-current borrowings, at Rs 743.72 crore and Rs 255.45 crore respectively. Changes in receivables, inventories and trade payables in subsequent reporting periods will also determine how much of Sandhar's operating profit converts into cash.