Sumedha Fiscal reports Rs 85.67 lakh operating cash outflow

Sumedha Fiscal Services Limited reported an Rs 85.67 lakh operating cash outflow for the half year ended 30 September 2026 despite profit before tax of Rs 3.90 crore, as inventory absorbed Rs 2.31 crore, trade receivables used Rs 70.89 lakh and tax payments totalled Rs 51.07 lakh.

Why did Sumedha Fiscal report negative operating cash flow?

Sumedha Fiscal reported negative cash flow from operating activities of Rs 85.67 lakh for the half year ended 30 September 2026, after generating operating profit before working-capital changes of Rs 2.73 crore. The indirect-method cash-flow statement shows that adjustments and subsequent movements in operating assets and liabilities outweighed the accounting profit recorded during the six-month period.

Cash generated from operations was already negative at Rs 34.60 lakh before tax, and tax paid of Rs 51.07 lakh increased the operating cash outflow to Rs 85.67 lakh. The statement was prepared under Indian Accounting Standard 7, or Ind AS 7, using the indirect method, which begins with profit before tax and adjusts for non-cash items, investment income and working-capital movements.

For comparison, Sumedha Fiscal recorded a larger operating cash outflow of Rs 2.83 crore in the year ended 31 March 2026. The annual figure is not directly comparable with the six-month result, but both disclosed periods recorded cash used in operating activities rather than cash generated from them.

Which working-capital items used Sumedha Fiscal’s cash?

Inventory was the largest identified working-capital use of cash, rising by Rs 2.31 crore in the half year ended 30 September 2026. Trade receivables used a further Rs 70.89 lakh, taking the combined cash absorption from these two items to Rs 3.02 crore before movements in other operating asset and liability categories.

The balance sheet shows inventories increased to Rs 19.32 crore at 30 September 2026 from Rs 17.01 crore at 31 March 2026, while trade receivables rose to Rs 3.82 crore from Rs 3.20 crore. These movements align with the cash-flow statement, although the filing gives no breakdown of inventory composition or trade-receivable ageing.

Other movements were smaller but did not offset the inventory and receivables use of cash. Other financial assets generated Rs 2.47 lakh, while other non-financial assets used Rs 1.07 lakh; other financial liabilities declined by Rs 13.38 lakh, while other non-financial liabilities added Rs 6.35 lakh. These items contributed to cash generated from operations of negative Rs 34.60 lakh.

The Rs 2.31 crore inventory outflow in the half year exceeded the Rs 1.92 crore outflow reported for the full year ended 31 March 2026, despite the differing periods. Receivables consumed Rs 70.89 lakh in the six months to September 2026, compared with Rs 40.94 lakh for the full year to March 2026.

How did Sumedha Fiscal’s profit differ from its cash generation?

Sumedha Fiscal reported profit before tax of Rs 3.90 crore in the half year ended 30 September 2026, down from Rs 5.57 crore in the corresponding half year ended 30 September 2025. Net profit after tax declined to Rs 3.02 crore from Rs 4.27 crore, while the filing does not provide a corresponding half-year cash-flow statement for 2025.

Non-cash and non-operating adjustments reduced profit before working-capital changes to Rs 2.73 crore from Rs 3.90 crore. They included interest income of Rs 79.21 lakh, a net gain on fair-value changes of Rs 71.33 lakh, profit on sale of investments of Rs 23.78 lakh, rental income of Rs 12.60 lakh and profit on sale of property, plant and equipment of Rs 11.03 lakh.

Some adjustments moved in the opposite direction. Depreciation and amortisation added back Rs 42.27 lakh, capital advances written off added Rs 30.00 lakh, expected-credit-loss provision added Rs 5.52 lakh and bad debts and sundry balances written off added Rs 3.14 lakh. These items explain the change from accounting profit to the pre-working-capital cash measure before the Rs 3.02 crore combined inventory and receivables outflow.

Revenue from operations declined to Rs 48.54 crore for the half year from Rs 52.87 crore a year earlier, while total expenses decreased to Rs 44.80 crore from Rs 47.91 crore. Sales of stock-in-trade, shares and securities fell to Rs 41.81 crore from Rs 45.68 crore, whereas interest income rose to Rs 79.21 lakh from Rs 25.83 lakh; Sumedha Fiscal identifies investment banking as its sole reporting segment.

What do Sumedha Fiscal’s other cash flows show?

Investing activities produced net cash inflow of Rs 1.73 crore in the half year ended 30 September 2026 because investment sales of Rs 7.73 crore exceeded investment purchases of Rs 6.60 crore. Sumedha Fiscal also received Rs 61.85 lakh of interest on investments, recorded Rs 48.39 lakh of term-deposit investment or withdrawal movement, and spent Rs 30.16 lakh on property, plant, equipment and intangible assets.

Financing activities used Rs 79.04 lakh, entirely identified as dividends paid. Negative operating cash flow, positive investing cash flow and the dividend payment resulted in a net increase in cash and cash equivalents of Rs 8.55 lakh, taking the closing balance to Rs 95.00 lakh at 30 September 2026 from Rs 86.45 lakh at the start of the period.

Cash and cash equivalents were only part of Sumedha Fiscal’s reported liquid balances. Bank balances other than cash equivalents were Rs 6.91 crore at 30 September 2026, up from Rs 6.42 crore at 31 March 2026, while investments were Rs 19.51 crore, marginally below Rs 19.68 crore at the March year-end.

Total assets increased to Rs 66.42 crore at 30 September 2026 from Rs 64.20 crore at 31 March 2026. Total equity rose to Rs 62.97 crore from Rs 60.72 crore, including other equity of Rs 54.98 crore versus Rs 52.74 crore, while total liabilities declined to Rs 3.45 crore from Rs 3.48 crore.

Conclusion

Sumedha Fiscal’s half-year figures show that reported profit did not translate into operating cash generation in the period ended 30 September 2026. The Rs 3.90 crore pre-tax profit was reduced by accounting adjustments and then outweighed by cash absorbed in inventories, receivables and tax payments, while investment transactions supported the rise in closing cash equivalents.

The next results should indicate whether inventories of Rs 19.32 crore and trade receivables of Rs 3.82 crore at 30 September 2026 convert into cash, and whether tax payments continue at the half-year pace. Sumedha Fiscal’s board approved the unaudited standalone results on 12 November 2026, and the filing provides no segment-specific cash-flow target beyond its single investment-banking reporting segment.