SMS Pharmaceuticals funds ₹85.88 crore H1FY27 capex from cash

SMS Pharmaceuticals Limited generated ₹105.76 crore of operating cash flow in H1FY27, exceeding its ₹85.88 crore capital expenditure, while cash and cash equivalents declined ₹9.77 crore to ₹36.11 crore after investing and financing outflows. The half-year financing cash flow included a ₹26.00 crore repayment of long-term borrowings.

How did SMS Pharmaceuticals fund H1FY27 capital expenditure?

SMS Pharmaceuticals funded ₹85.88 crore of capital expenditure, or capex, in H1FY27 from ₹105.76 crore of cash flow from operating activities. Operating cash flow exceeded the reported capex line by ₹19.88 crore before other investing and financing movements.

Cash generated from operations was ₹123.54 crore in H1FY27, compared with profit before tax of ₹80.01 crore. The cash-flow statement reported a total investing outflow of ₹85.44 crore, marginally below the ₹85.88 crore capex figure because the abridged statement includes other investing movements within that total.

The ₹105.76 crore H1FY27 operating cash flow was above the ₹59.22 crore reported for FY26, although H1FY27 covers six months and FY26 covers a full year. Capex had been ₹130.56 crore in FY26, ₹123.38 crore in FY25 and ₹52.16 crore in FY24, showing that investment spending has remained above the FY24 level through the latest half year.

What changed in SMS Pharmaceuticals’ balance sheet in H1FY27?

SMS Pharmaceuticals’ total assets increased ₹98.21 crore from FY26 to ₹1,460.65 crore in H1FY27. Property, plant and equipment rose ₹48.25 crore to ₹579.47 crore, while capital work-in-progress increased ₹16.62 crore to ₹138.26 crore.

Non-current assets rose ₹50.49 crore to ₹774.92 crore, and current assets increased ₹47.72 crore to ₹685.73 crore. The presentation reports ₹85.88 crore of H1FY27 capex but does not allocate spending between individual projects, property and equipment, or capital work-in-progress.

Total equity increased ₹56.89 crore to ₹842.70 crore, comprising ₹9.37 crore of equity share capital and ₹833.33 crore of other equity. Non-current liabilities fell ₹16.88 crore to ₹206.77 crore, while current liabilities increased ₹58.20 crore to ₹411.18 crore.

How did SMS Pharmaceuticals’ working-capital balances move?

SMS Pharmaceuticals recorded increases in inventories, trade receivables and trade payables in H1FY27. Inventories rose ₹26.54 crore from FY26 to ₹377.74 crore, while trade receivables rose ₹27.42 crore to ₹243.29 crore.

Trade payables due to creditors other than micro and small enterprises increased ₹50.02 crore to ₹170.21 crore. In contrast, payables due to micro and small enterprises were unchanged at ₹0.25 crore, contributing to the rise in total current liabilities to ₹411.18 crore.

Other current assets increased ₹4.55 crore to ₹25.97 crore, while current other financial assets declined ₹1.03 crore to ₹2.42 crore. These movements show that the ₹47.72 crore increase in current assets was led by inventory and receivables rather than by cash, which fell to ₹36.11 crore.

How did SMS Pharmaceuticals’ borrowings and financing cash flows change?

SMS Pharmaceuticals’ combined borrowings declined ₹15.56 crore from ₹365.04 crore at FY26 to ₹349.48 crore in H1FY27. Non-current borrowings fell ₹18.49 crore to ₹153.15 crore, while current borrowings increased ₹2.93 crore to ₹196.33 crore.

Financing activities used ₹30.08 crore in H1FY27, compared with a ₹76.03 crore inflow in FY26. The H1FY27 outflow included ₹26.00 crore of long-term borrowing repayments and ₹3.75 crore of dividends paid.

The company reported ₹10.31 crore of net proceeds from short-term borrowings during H1FY27, but no proceeds from long-term borrowings or share warrants. In FY26, the statement had reported ₹62.32 crore of long-term borrowing proceeds and ₹47.62 crore of net proceeds from share warrants.

What is SMS Pharmaceuticals’ capex plan through FY27?

SMS Pharmaceuticals identifies ₹280 crore of capex spend to be completed by FY27, with 89% of the project mix classified as brownfield and 11% as greenfield. The programme covers capacity expansion for existing active pharmaceutical ingredients, or APIs, and capacity for the new API pipeline.

The presentation also says land acquisition is in process for a greenfield project. It does not state whether the ₹280 crore figure is incremental to the ₹85.88 crore spent in H1FY27 or is the full amount of the current capex programme.

Management says it completed one capex cycle during the preceding three to four years and is focused on asset utilisation in the current cycle. Management targets returns in the high-teens range from the current capex round, which is a target rather than a reported financial result.

Conclusion

SMS Pharmaceuticals generated ₹105.76 crore of operating cash flow in H1FY27 against ₹85.88 crore of capex, even as cash declined ₹9.77 crore to ₹36.11 crore. Its total assets grew ₹98.21 crore, equity increased ₹56.89 crore and combined borrowings declined ₹15.56 crore from FY26.

The next disclosures should show execution against the ₹280 crore capex plan, including progress on greenfield land acquisition and the timing of capacity additions. Investors can also track whether inventories of ₹377.74 crore, receivables of ₹243.29 crore and creditor payables of ₹170.21 crore change as the programme advances toward FY27.