Simran Farms Limited borrowings double as inventory drains cash

Simran Farms Limited’s standalone borrowings more than doubled to Rs 67.83 crore at September 30, 2026, from Rs 33.36 crore at March 31, 2026, while a Rs 48.38 crore inventory increase contributed to negative operating cash flow of Rs 9.82 crore for the six months ended September 30.

How much did Simran Farms’ borrowings increase?

Simran Farms’ standalone borrowings increased by Rs 34.48 crore to Rs 67.83 crore at September 30, 2026, from Rs 33.36 crore at March 31, 2026. Current borrowings rose to Rs 55.48 crore from Rs 32.44 crore, while non-current borrowings increased to Rs 12.35 crore from Rs 0.91 crore.

The September 30 balance sheet shows that current borrowings remained the larger part of Simran Farms’ debt at Rs 55.48 crore, although non-current borrowings rose by Rs 11.44 crore from the March 31 level. Current liabilities increased to Rs 160.42 crore from Rs 118.10 crore, while total assets rose to Rs 233.13 crore from Rs 177.79 crore.

Why did inventory absorb cash at Simran Farms?

Inventory was Simran Farms’ largest reported working-capital cash use in the six months ended September 30, 2026, increasing by Rs 48.38 crore. The cash-flow statement records an inventory outflow of Rs 48.38 crore, compared with an outflow of Rs 28.09 crore in the six months ended September 30, 2025.

The Rs 174.57 crore inventory balance accounted for about 85% of Simran Farms’ Rs 205.31 crore standalone current assets at September 30, 2026. Trade receivables also rose by Rs 6.28 crore to Rs 24.93 crore, whereas receivables generated Rs 2.09 crore of cash in the prior-year six-month period.

Simran Farms is primarily engaged in poultry breeding and farming and reported no identifiable operating segment under Indian Accounting Standard 108. The filing does not provide an inventory break-up, turnover measure, stocking explanation or management target for the Rs 174.57 crore closing inventory balance.

What happened to Simran Farms’ operating cash flow?

Simran Farms reported negative standalone operating cash flow of Rs 9.82 crore for the six months ended September 30, 2026, compared with negative Rs 31.34 lakh in the corresponding 2025 period. Operating profit before working-capital changes was Rs 3.67 crore, up from Rs 2.35 crore, but working-capital movements reduced operating profit after those changes to negative Rs 9.69 crore.

The cash-flow statement records Rs 23.10 crore of higher borrowings and Rs 19.26 crore of higher trade payables within working-capital movements. These sources did not offset the Rs 48.38 crore inventory outflow and Rs 6.28 crore receivables outflow, while income-tax payments of Rs 12.86 lakh took net operating cash outflow to Rs 9.82 crore.

Financing activities generated Rs 11.19 crore of cash in the 2026 half year, compared with an outflow of Rs 16.66 lakh a year earlier. Simran Farms reported Rs 11.48 crore of cash received from borrowings, Rs 10.44 lakh of repayments and Rs 18.64 lakh of interest paid; after an investing outflow of Rs 89.96 lakh, cash and cash equivalents rose to Rs 1.64 crore from Rs 1.17 crore at March 31, 2026.

Did Simran Farms remain profitable despite the cash outflow?

Simran Farms remained profitable, reporting standalone net profit of Rs 1.44 crore for the six months ended September 30, 2026, compared with Rs 1.06 crore a year earlier. Revenue from operations increased to Rs 477.48 crore from Rs 393.41 crore, while profit before tax rose to Rs 2.19 crore from Rs 1.51 crore.

Reported profit and operating cash flow moved in different directions during the half year. Standalone net profit increased by Rs 38.10 lakh, while operating cash flow deteriorated by Rs 9.51 crore, with the reconciliation identifying inventory and receivables as the principal cash uses between Rs 3.67 crore of operating profit before working-capital changes and the negative operating cash result.

Finance cost declined to Rs 1.66 crore in the six months ended September 30, 2026, from Rs 1.78 crore a year earlier, despite the Rs 34.48 crore rise in borrowings from March 31, 2026. The filing does not disclose interest rates, maturity dates, security, lenders or the intended use of additional borrowings.

How do consolidated figures compare with Simran Farms’ standalone results?

Consolidated borrowings were also Rs 67.83 crore at September 30, 2026, matching the standalone total. Consolidated operating cash outflow was Rs 9.64 crore, compared with standalone outflow of Rs 9.82 crore, and consolidated cash and cash equivalents ended at Rs 1.67 crore against standalone cash of Rs 1.64 crore.

The consolidated financial statements include subsidiary Puregene Biotech Limited. The auditor’s review report states that the subsidiary recorded revenue of Rs 27 lakh and net profit after tax of Rs 4.52 lakh for the six months ended September 30, 2026, while consolidated net profit was Rs 1.49 crore against standalone net profit of Rs 1.44 crore.

Consolidated trade payables due to parties other than micro, small and medium enterprises were Rs 91.42 crore at September 30, 2026, compared with Rs 93.88 crore on a standalone basis. Consolidated current liabilities were Rs 158.78 crore, lower than standalone current liabilities of Rs 160.42 crore.

Conclusion

The half-year filing shows that Simran Farms’ higher reported earnings did not translate into operating cash generation. Revenue rose by Rs 84.07 crore and standalone net profit increased to Rs 1.44 crore, but inventory rose by Rs 48.38 crore, operating cash flow turned to negative Rs 9.82 crore and total borrowings increased by Rs 34.48 crore to Rs 67.83 crore.

The next disclosures will show whether the Rs 174.57 crore inventory balance and Rs 24.93 crore receivables balance decline, and whether borrowings change from the Rs 67.83 crore reported at September 30, 2026. The filing does not disclose an inventory reduction target, borrowing repayment plan or debt maturity schedule.