V-MARC H1 profit rises 104% as operating cash turns negative

V-MARC India Limited reported consolidated H1 FY27 profit after tax of Rs 76.43 crore, up 103.8% year on year, while its standalone cash-flow statement recorded a Rs 45.52 crore operating outflow for the six months ended 30 September 2026 as inventories and receivables expanded.

How fast did V-MARC's profit and revenue grow in H1 FY27?

V-MARC's standalone revenue from operations rose 84.1% year on year to Rs 1,273.25 crore in H1 FY27, while profit after tax increased 104.1% to Rs 76.54 crore. The consolidated management discussion reported revenue of Rs 1,275.36 crore, up 84.4%, and profit after tax of Rs 76.43 crore, up 103.8%, for the half year ended 30 September 2026.

Standalone profit before tax rose 106.6% to Rs 102.70 crore from Rs 49.71 crore in H1 FY26, exceeding the revenue growth rate. Tax expense increased 114.1% to Rs 26.15 crore from Rs 12.22 crore, while the company reported one business segment, Electricals, in its standalone financial results.

In the September 2026 quarter, standalone revenue was Rs 719.85 crore, 29.6% above Rs 555.51 crore in the June 2026 quarter. Standalone profit after tax rose to Rs 47.99 crore from Rs 28.55 crore sequentially, and the board approved the unaudited half-year and quarterly results on 6 November 2026 following a limited review by the statutory auditor.

Why did V-MARC's operating cash flow turn negative?

V-MARC's standalone operating cash flow turned negative because cash absorbed by working-capital assets exceeded operating profit before working-capital changes. Net cash used in operating activities was Rs 45.52 crore in the six months ended September 2026, compared with net operating cash generated of Rs 108.10 crore in the full year ended 31 March 2026.

Operating profit before working-capital changes was Rs 149.04 crore in H1 FY27, but inventories used Rs 222.71 crore of cash and trade receivables used Rs 127.93 crore. Other financial assets and other current assets used another Rs 19.81 crore and Rs 27.69 crore respectively, before changes in liabilities partly offset these uses.

Trade payables supplied Rs 192.82 crore of cash during H1 FY27, while other liabilities contributed Rs 23.88 crore and other financial liabilities added Rs 3.33 crore. These inflows did not cover the asset build-up, and net direct taxes paid of Rs 16.99 crore widened the cash outflow from Rs 28.52 crore generated from operations to Rs 45.52 crore.

How did V-MARC's working capital and borrowings change?

V-MARC's net working capital increased by Rs 155.10 crore to Rs 406.43 crore at 30 September 2026 from Rs 251.33 crore at 31 March 2026. Management attributed the rise principally to inventory built for a higher scale of execution, while stating that receivable days improved despite the higher receivables balance.

The working-capital cycle lengthened to 58 days of revenue from 51 days at the March 2026 year-end. In the standalone balance sheet, inventories increased to Rs 488.84 crore from Rs 266.13 crore and trade receivables rose to Rs 543.49 crore from Rs 418.22 crore; total trade payables also increased to Rs 625.90 crore from Rs 433.08 crore.

Borrowings excluding lease liabilities rose to Rs 359.82 crore at 30 September 2026 from Rs 213.66 crore at 31 March 2026. Management said the increase funded capital expenditure and working capital, reporting debt to equity of 0.99 times against 0.74 times and debt to trailing-12-month earnings before interest, tax, depreciation and amortisation of 1.33 times against 1.06 times for FY26.

How much did V-MARC invest in capacity during H1 FY27?

V-MARC used Rs 105.12 crore in net investing activities during H1 FY27, principally for property, plant and equipment and related capital advances. The standalone cash-flow statement records Rs 105.09 crore of property, plant and equipment purchases, Rs 18.40 crore of capital advances and Rs 17.06 crore of proceeds from asset sales.

Management reported H1 FY27 capital expenditure of Rs 106.40 crore, adding 35,000 square metres to owned land and 47,400 kilometres of wire and cable capacity. Installed capacity reached 260,000 kilometres at 30 September 2026 from 212,600 kilometres at 31 March 2026, while management plans approximately Rs 400 crore of further capital expenditure through FY30 to target capacity above one million kilometres.

The investment programme also coincided with a rise in standalone property, plant and equipment to Rs 226.21 crore from Rs 200.07 crore, and capital work-in-progress to Rs 57.29 crore from Rs 36.30 crore. Management cited commissioning of a second E-beam line and the launch of an E-beam submersible cable for agricultural applications as additions to the product portfolio.

What does V-MARC need to meet its revised FY27 outlook?

V-MARC needs about Rs 1,600.34 crore of H2 FY27 revenue to meet management's revised guidance of more than 60% growth for FY27. Management raised the revenue-growth guidance from more than 40% while retaining its earnings before interest, tax, depreciation and amortisation margin target of 11% to 12%.

Management calculated that 60% growth on FY26 revenue would imply FY27 revenue of Rs 2,875.70 crore, of which H1 consolidated revenue of Rs 1,275.36 crore represented 44.3%. The required H2 revenue would be 44.8% above H2 FY26, while the reported H1 consolidated EBITDA margin of 11.6% was within the target range.

Management identified operating efficiencies, higher retail and export contributions, and backward integration into compounds and conductors as supports for the outlook. Exports reached Rs 181.36 crore in H1 FY27, representing 14.2% of revenue and 2.9 times the Rs 62.60 crore reported for all of FY26; management also plans to attend six to 10 international cable and wire exhibitions during FY27.

Conclusion

V-MARC's H1 FY27 results combine materially higher reported profit with negative standalone operating cash flow. Revenue and profit growth lifted H1 consolidated profit after tax to Rs 76.43 crore, but inventory, receivables and other working-capital assets absorbed more cash than increased payables and other liabilities supplied, leaving a Rs 45.52 crore operating outflow.

The next disclosed measures to watch are whether the 58-day working-capital cycle declines, whether borrowings remain necessary to finance working capital and capital expenditure, and whether H2 revenue reaches the roughly Rs 1,600.34 crore management calculates is needed for more than 60% FY27 growth. Management's FY30 plan also calls for approximately Rs 400 crore of additional capital expenditure and capacity above one million kilometres.