Sarthak Metals generates Rs 4.12 crore first-half operating cash

Sarthak Metals Limited generated Rs 4.12 crore of net operating cash in the half year ended September 30, 2026, after a Rs 9.27 crore release from inventories and trade receivables. The inflow followed Rs 4.10 crore of profit before tax and contrasted with a Rs 32.56 crore operating cash outflow in the year ended March 31, 2026.

How did Sarthak Metals generate Rs 4.12 crore of operating cash?

Sarthak Metals generated Rs 4.12 crore of operating cash by converting Rs 4.10 crore of profit before tax and a Rs 1.19 crore net working-capital inflow into Rs 5.38 crore of cash generated from operations before tax. Net direct taxes of Rs 1.26 crore reduced that figure to the reported operating cash inflow for the half year ended September 30, 2026.

The indirect cash-flow statement, prepared under Indian Accounting Standard 7, shows operating profit before working-capital changes of Rs 4.19 crore. Depreciation added back Rs 1.24 crore, while net interest of Rs 71.41 lakh and profit on sale of investments of Rs 37.32 lakh were deductions. Other adjustments together left a net pre-working-capital adjustment of Rs 8.54 lakh.

The filing does not provide a prior first-half cash-flow comparator, but it does show a marked change from the full year ended March 31, 2026. That year recorded Rs 9.13 crore of operating profit before working-capital changes but a Rs 39.78 crore working-capital outflow, resulting in a Rs 32.56 crore operating cash outflow. The September 2026 half year instead recorded a Rs 1.19 crore working-capital inflow.

Which working-capital movements released cash at Sarthak Metals?

Sarthak Metals released Rs 9.27 crore from two principal working-capital movements: trade receivables declined by Rs 5.15 crore and inventories declined by Rs 4.12 crore in the half year ended September 30, 2026. Inventory closed at Rs 35.12 crore, down from Rs 39.24 crore on March 31, while trade receivables fell to Rs 51.71 crore from Rs 56.85 crore.

Those collections and inventory reductions were partly offset by Rs 3.40 crore invested in other current assets and Rs 2.23 crore in other financial assets. The cash-flow statement also records a Rs 1.36 crore decline in trade payables, a Rs 55.15 lakh decline in current liabilities and a Rs 53.89 lakh decline in provisions, which reduced the overall working-capital benefit to Rs 1.19 crore.

The balance sheet identifies the main period-end offsets. Other current assets rose to Rs 9.52 crore on September 30, 2026 from Rs 6.11 crore at March 31, while other financial assets within non-current assets increased to Rs 16.79 crore from Rs 14.56 crore. Total current assets nevertheless fell by Rs 5.77 crore to Rs 96.53 crore because inventory and receivable reductions exceeded the increase in other current assets.

What happened to Sarthak Metals' borrowings and cash balance?

Sarthak Metals reduced current borrowings by Rs 4.02 crore during the half year, leaving Rs 2.58 crore outstanding on September 30, 2026 compared with Rs 6.60 crore on March 31, 2026. The financing cash-flow statement records the same Rs 4.02 crore outflow under other short-term borrowings, and the balance sheet shows no non-current borrowings at either reporting date.

Net cash used in financing activities was Rs 4.27 crore, comprising the borrowing reduction and Rs 25.33 lakh of interest paid. There were no proceeds from long-term borrowings and no dividend payment during the half year. In contrast, financing activities generated Rs 5.64 crore in the year ended March 31, 2026, including Rs 6.60 crore from other short-term borrowings.

Cash and cash equivalents in the cash-flow statement rose by Rs 9.05 lakh to Rs 19.08 lakh at September 30, 2026 from Rs 10.03 lakh at April 1, 2026. The balance sheet shows Rs 16.24 lakh of cash and cash equivalents and Rs 2.84 lakh of other bank balances at September 30. The Rs 4.12 crore operating inflow and Rs 24.83 lakh investing inflow were substantially offset by financing outflows.

How did profit and investing cash flows compare with operating cash?

Sarthak Metals reported Rs 2.61 crore of net profit on Rs 107.58 crore of revenue from operations in the half year ended September 30, 2026, compared with Rs 4.12 crore of operating cash. Profit before tax was Rs 4.10 crore, and basic and diluted earnings per share were Rs 1.89. The company reports only one segment, Cored Wires, so no segment-level cash-flow split is available.

In the September 2026 quarter, revenue from operations was Rs 52.37 crore and profit before tax was Rs 2.03 crore, versus Rs 55.21 crore and Rs 2.07 crore respectively in the June 2026 quarter. Net profit was Rs 1.28 crore in September, compared with Rs 1.33 crore in June. Against the September 2025 quarter, revenue increased from Rs 36.31 crore and profit before tax rose from Rs 1.03 crore.

Investing activities produced a Rs 24.83 lakh net inflow in the September half year, compared with a Rs 2.14 crore outflow in the year ended March 31, 2026. Interest received was Rs 96.74 lakh, while fixed-asset and capital-work-in-progress investment was Rs 12.81 lakh. The statement also records Rs 60 lakh as a negative amount under proceeds from sale of investments without further transaction detail.

Conclusion

Sarthak Metals converted a Rs 4.10 crore pre-tax profit into Rs 4.12 crore of operating cash in the September 2026 half year because Rs 5.15 crore of receivable collections and a Rs 4.12 crore inventory reduction outweighed other working-capital uses. That cash generation coincided with a Rs 4.02 crore reduction in current borrowings to Rs 2.58 crore.

What remains unresolved is whether the September 30 balances of Rs 35.12 crore in inventory and Rs 51.71 crore in trade receivables will continue to release cash or reverse into working-capital use. The November 13, 2026 filing provides no cash-flow target, borrowing plan or scheduled capital programme, while its interim results were subject to a limited review.