The Phosphate Company Limited operating cash outflow doubles

The Phosphate Company Limited reported a Rs 34.185 crore operating cash outflow for the half year ended 30 September 2026, more than double the Rs 15.7602 crore outflow a year earlier, as inventory and trade-and-other receivables absorbed Rs 36.5665 crore despite borrowing and investment-sale inflows.

Why did The Phosphate Company’s operating cash outflow more than double?

The Phosphate Company’s operating cash outflow more than doubled because cash absorbed by working capital outweighed the cash released by liabilities and provisions. Net cash used in operating activities was Rs 34.185 crore in the half year ended 30 September 2026, against Rs 15.7602 crore in the half year ended 30 September 2025, an increase of Rs 18.4248 crore.

Cash generated from operations was negative Rs 34.1695 crore before direct tax paid of Rs 1.55 lakh, compared with negative Rs 15.7477 crore before a Rs 1.25 lakh tax refund in the prior-year half year. Operating profit before working-capital changes was a loss of Rs 1.2209 crore, compared with a loss of Rs 26.59 lakh a year earlier.

The half-year loss before tax widened to Rs 3.027 crore from Rs 2.2579 crore. Revenue from operations increased to Rs 57.5442 crore from Rs 45.2258 crore, but earnings before interest, depreciation and tax were a loss of Rs 90.16 lakh, compared with a profit of Rs 12.79 lakh in the corresponding period.

The Phosphate Company said its business is seasonal and that performance in a particular current quarter is not indicative of the full year. Its September 2026 half-year figures were approved by the board on 13 November 2026 and were subject to a limited review by S K Agrawal and Co Chartered Accountants LLP.

How much cash did inventory and receivables absorb?

Inventory and trade-and-other receivables absorbed a combined Rs 36.5665 crore during the half year ended 30 September 2026. The inventory increase used Rs 24.5975 crore and the rise in trade and other receivables used Rs 11.969 crore, making them the two largest stated working-capital cash outflows.

The combined outflow was Rs 1.1462 crore lower than the Rs 37.7127 crore absorbed in the half year ended 30 September 2025. Inventory-related cash use declined from Rs 27.4645 crore, while the receivables-related outflow rose from Rs 10.2482 crore, so the improvement in inventory cash use was partly offset by the increase in receivables use.

The balance sheet records inventories of Rs 56.2476 crore at 30 September 2026, up from Rs 31.6501 crore at 31 March 2026. Trade receivables rose to Rs 23.1065 crore from Rs 11.1772 crore, while other current assets increased to Rs 13.8752 crore from Rs 11.0835 crore.

Current assets consequently increased to Rs 95.6827 crore at 30 September 2026 from Rs 72.2964 crore at 31 March 2026. The Rs 11.9293 crore increase in the balance-sheet trade receivables line differs slightly from the Rs 11.969 crore cash-flow line for trade and other receivables, which includes a broader receivables category.

What cash inflows partly funded The Phosphate Company’s working capital?

The Phosphate Company partly funded the operating outflow with a Rs 6.6325 crore net cash inflow from investing activities and a Rs 18.9749 crore net cash inflow from financing activities. Investing inflow principally reflected Rs 6.8012 crore of proceeds from sale of investments, partly offset by Rs 18.77 lakh spent on fixed assets or capital work-in-progress.

Net financing inflow included Rs 4.10 crore of proceeds from long-term borrowings and Rs 17.2014 crore from short-term borrowings. These movements were reduced by Rs 1.605 crore of interest paid and Rs 72.15 lakh of dividend payment, leaving the financing inflow above the Rs 15.6851 crore reported in the prior-year half.

The largest change in the working-capital offsets was current liabilities, which generated Rs 4.3205 crore of cash in the latest half year, against Rs 28.2071 crore a year earlier. Increases in financial and other liabilities contributed Rs 54.37 lakh, and provisions contributed Rs 90.81 lakh, compared with Rs 20.90 lakh and Rs 83.73 lakh respectively in the prior-year period.

The company also reported a Rs 6.8012 crore investment-sale receipt during the latest half year, whereas the prior-year cash-flow statement showed no proceeds from sale of investments. Interest received was Rs 1.90 lakh in the latest period, compared with Rs 5.61 lakh a year earlier.

How did cash and borrowings change at The Phosphate Company?

The Phosphate Company ended 30 September 2026 with Rs 46.96 lakh of cash and cash equivalents, down from an opening balance of Rs 9.0472 crore. The cash-flow statement shows a net decrease of Rs 8.5776 crore during the half year, compared with a Rs 1.25 lakh decrease in the half year ended 30 September 2025.

Closing cash comprised Rs 35.32 lakh held with banks and Rs 11.64 lakh in cash on hand. Other bank balances were Rs 2 lakh at 30 September 2026, down from Rs 66.78 lakh at 31 March 2026; these balances are presented separately from cash and cash equivalents in the balance sheet.

Total borrowings rose to Rs 45.9978 crore at 30 September 2026 from Rs 23.6964 crore at 31 March 2026. Non-current borrowings increased by Rs 4.10 crore to Rs 13.99 crore, while current borrowings increased by Rs 17.2014 crore to Rs 31.0078 crore.

Trade payables increased to Rs 35.1832 crore at 30 September 2026 from Rs 30.1692 crore at 31 March 2026. Finance costs for the half year were Rs 1.844 crore, marginally below Rs 1.8976 crore in the corresponding 2025 period despite the higher balance-sheet borrowings at the September 2026 date.

What should readers monitor after The Phosphate Company’s half-year cash flow?

Readers should monitor whether the Rs 56.2476 crore inventory balance and Rs 23.1065 crore trade-receivables balance convert into cash in subsequent reporting periods. These balances increased by Rs 24.5975 crore and Rs 11.9293 crore respectively from 31 March 2026, while cash and cash equivalents fell by Rs 8.5776 crore.

Readers should also monitor the funding mix supporting working capital, because total borrowings increased by Rs 22.3014 crore during the half year and current borrowings accounted for Rs 17.2014 crore of that increase. The filing does not disclose a target for inventory, receivables, cash balances or borrowings.

The next reported figures will also show whether the decline in current-liability cash support continues. Current liabilities generated Rs 4.3205 crore of cash in the latest half year, Rs 23.8866 crore below the Rs 28.2071 crore contribution in the corresponding 2025 period.

Conclusion

The Phosphate Company’s Rs 34.185 crore half-year operating cash outflow reflected a working-capital build-up led by Rs 24.5975 crore of inventory cash use and Rs 11.969 crore of receivables cash use. Investment-sale proceeds and higher borrowings supplied cash, but the combined inflows did not prevent cash and cash equivalents from falling to Rs 46.96 lakh.

The next point to watch is whether inventory and receivables release cash, particularly because The Phosphate Company says its business is seasonal and a quarter does not indicate full-year performance. The filing sets no cash, working-capital or borrowing target, leaving future results to show how the Rs 45.9978 crore borrowing balance and September 2026 working-capital levels develop.