Slone Infosystems posts Rs 6.95 crore operating cash outflow

Slone Infosystems Limited posted net cash used in operating activities of Rs 6.95 crore for the half year ended September 30, 2026, despite reporting profit after tax of Rs 4.65 crore. A Rs 33.88 crore inventory increase, together with lower trade payables and higher advances, outweighed cash released from receivables.

Why did Slone Infosystems report an operating cash outflow?

Slone Infosystems reported an operating cash outflow because its working-capital movements reduced cash generated from operations to negative Rs 6.49 crore before tax payments. Net income tax paid of Rs 46 lakh then took net cash used in operating activities to Rs 6.95 crore for the half year ended September 30, 2026.

The cash-flow result differed from reported earnings because the operating cash-flow statement adjusts profit for non-cash items and balance-sheet movements. Slone Infosystems reported Rs 1.71 crore of depreciation, Rs 1.61 crore of taxes and Rs 70.72 lakh of interest expense in the reconciliation, while deducting Rs 2.46 crore of other income.

The income statement reported revenue from operations of Rs 129.95 crore for the September 2026 half year, compared with Rs 100.70 crore in the corresponding unaudited half-year column. Total expenses were Rs 126.16 crore, producing profit before tax of Rs 6.26 crore and profit after tax of Rs 4.65 crore, but those earnings did not translate into positive operating cash.

How much did inventory build at Slone Infosystems?

Slone Infosystems recorded a Rs 33.88 crore increase in inventories in its September 2026 half-year cash-flow statement. This was the largest individual working-capital cash use disclosed and exceeded the Rs 32.75 crore cash release associated with lower trade receivables.

Inventory on the September 30, 2026 balance sheet was Rs 56.76 crore, against Rs 22.88 crore in the comparative balance-sheet column. Trade receivables moved in the opposite direction, declining to Rs 22.49 crore from Rs 55.24 crore, consistent with the Rs 32.75 crore cash inflow recorded in the cash-flow statement.

The Rs 32.75 crore reduction in receivables was Rs 1.13 crore smaller than the inventory build alone. The source also records a Rs 10.22 crore decrease in trade payables and a Rs 4.25 crore increase in short-term loans and advances, both of which reduced operating cash during the six months.

Which other working-capital changes used Slone Infosystems cash?

Slone Infosystems reported a Rs 10.22 crore decrease in trade payables, a Rs 4.25 crore increase in short-term loans and advances, and a Rs 17.27 lakh decrease in other current liabilities. These items added to the cash use from inventory after the reduction in receivables had provided Rs 32.75 crore of cash.

The company also reported a Rs 1.65 crore increase in provisions and a Rs 1.42 crore decrease in current assets in the cash-flow reconciliation. Together with the inventory, receivable, payable and advances movements, these entries left cash generated from operations at negative Rs 6.49 crore before the Rs 46 lakh tax payment.

The balance sheet shows short-term borrowings at Rs 13.40 crore at September 30, 2026, compared with Rs 9.03 crore in the comparative column. Long-term borrowings were Rs 3.05 crore compared with Rs 34.02 lakh, while cash and cash equivalents declined to Rs 4.66 crore from Rs 6.89 crore.

How did Slone Infosystems fund its cash requirements?

Slone Infosystems generated Rs 7.98 crore of net cash from financing activities during the half year ended September 30, 2026. The financing section records Rs 4.37 crore of proceeds from short-term borrowings, Rs 2.71 crore from long-term borrowings and Rs 1.61 crore from share warrants, offset by Rs 70.72 lakh of interest paid.

Investing activities used Rs 3.26 crore in the period, principally through Rs 3.38 crore spent on property, plant and equipment. A Rs 11.69 lakh decrease in other non-current assets partly offset that capital expenditure in the investing cash-flow statement.

The combined cash flows resulted in a Rs 2.23 crore decrease in cash and cash equivalents from the opening balance of Rs 6.89 crore to Rs 4.66 crore. Slone Infosystems’ board approved the unaudited half-year results on November 12, 2026, and the limited-review report stated that nothing had come to the reviewer’s attention to indicate a material misstatement.

What do the warrant proceeds show about Slone Infosystems funding?

Slone Infosystems had received Rs 9.81 crore from warrant holders through September 2026, comprising Rs 8.20 crore collected in March 2025 and Rs 1.61 crore collected in September 2026. The September 2026 financing cash flow separately records the Rs 1.61 crore received from the issue of share warrants.

The warrant-utilisation statement says Rs 6.15 crore of the Rs 7.36 crore allocated to working-capital requirements had been used by September 30, 2026, leaving Rs 1.21 crore unutilised. Of Rs 2.45 crore allocated to general corporate purpose, Rs 2.05 crore had been used and Rs 40.34 lakh remained unutilised.

Management stated that the unutilised preferential-issue proceeds were parked in a separate bank account at September 30, 2026. The auditor’s certificate says the funds used were for the stated purposes and reports no deviation or variation in the use of the preferential-issue proceeds.

Conclusion

Slone Infosystems reported Rs 4.65 crore of profit after tax in the September 2026 half year, but operating cash flow was negative Rs 6.95 crore. The main driver was a Rs 33.88 crore inventory increase, which was only partly offset by a Rs 32.75 crore reduction in trade receivables and was compounded by a Rs 10.22 crore decrease in trade payables.

The next disclosure will show whether inventory converts into sales and cash, and whether borrowings continue to fund working-capital needs after short-term borrowings rose to Rs 13.40 crore. Slone Infosystems also had Rs 1.21 crore of working-capital proceeds and Rs 40.34 lakh of general-corporate-purpose proceeds unutilised at September 30, 2026, with management saying those amounts were held in a separate bank account.