Vama Wovenfab’s Operating Cash Flow Was Negative for Two Years

Vama Wovenfab Limited reported profit after tax of Rs 11.5451 crore for the year ended March 31, 2026, more than four times its Rs 2.6299 crore FY2024 profit, but its operating cash flow was negative for two consecutive years. The restated cash-flow statement reported an outflow of Rs 6.3147 crore in FY2026 after an outflow of Rs 2.3251 crore in FY2025.

Why was Vama Wovenfab’s operating cash flow negative for two years?

Vama Wovenfab reported negative operating cash flow in FY2025 and FY2026 even as profit before tax and operating profit before working-capital changes increased. Under the indirect method prescribed by Accounting Standard 3, or AS-3, profit before tax of Rs 15.3322 crore in FY2026 was adjusted for depreciation, gratuity and interest expenses to reach operating profit before working-capital changes of Rs 17.7792 crore.

The FY2026 cash-flow statement reports cash used from operations of Rs 3.7008 crore before income-tax payments and net cash used in operating activities of Rs 6.3147 crore after tax paid of Rs 2.6139 crore. The statement separately records an inventory increase of Rs 7.994 crore, an increase in other current assets of Rs 58.05 lakh and a Rs 29.61 lakh reduction in short-term loans and advances.

The listed FY2026 working-capital movements include cash inflows from a Rs 1.4988 crore decrease in trade receivables, a Rs 15.2806 crore increase in trade payables and a Rs 58.01 lakh increase in other current liabilities. Those individual movements do not arithmetically reconcile with the reported Rs 3.7008 crore cash-used-from-operations subtotal, so the restated statement does not provide enough consistent detail to attribute the reported deficit to any one working-capital item.

How did cash conversion change as reported profit increased?

Vama Wovenfab’s reported profit increased in each of the three disclosed periods, while net operating cash shifted from an inflow in FY2024 to outflows in FY2025 and FY2026. Profit after tax rose from Rs 2.6299 crore in FY2024 to Rs 6.8376 crore in FY2025 and Rs 11.5451 crore in FY2026, while the company’s revenue from operations rose from Rs 27.8657 crore to Rs 77.4481 crore and then Rs 214.6171 crore.

The reported operating cash deficit widened by Rs 3.9896 crore between FY2025 and FY2026, even as profit before tax increased by Rs 6.4157 crore to Rs 15.3322 crore. For operating cash generation to move closer to accounting profit in a later period, reported cash released from receivables and other working-capital accounts would need to exceed cash absorbed by inventory, taxes and other operating uses.

Which working-capital balances expanded most?

Vama Wovenfab’s inventory balance increased in all three balance sheets, reaching Rs 44.7785 crore at March 31, 2026. Inventory was Rs 36.7846 crore at March 31, 2025 and Rs 27.5309 crore at March 31, 2024, while the cash-flow statement records inventory increases of Rs 6.0838 crore, Rs 9.267 crore and Rs 7.994 crore respectively.

Trade receivables showed a different pattern. The balance expanded from Rs 1.5408 crore at March 31, 2024 to Rs 19.9153 crore at March 31, 2025, before declining to Rs 18.4165 crore at March 31, 2026. Consistently, the cash-flow statement records an Rs 18.3745 crore receivables increase in FY2025, followed by an Rs 1.4988 crore decrease in FY2026.

Trade payables in the cash-flow statement increased by Rs 10.7192 crore in FY2024, Rs 16.6295 crore in FY2025 and Rs 15.2806 crore in FY2026. However, the balance sheet’s separately presented trade payables for creditors other than micro and small enterprises declined from Rs 31.0345 crore at March 31, 2025 to Rs 15.7538 crore at March 31, 2026. The cash-flow movement and balance-sheet line should therefore be read as reported disclosures rather than treated as directly interchangeable measures.

How was Vama Wovenfab’s cash balance supported?

Vama Wovenfab’s reported cash balance increased in FY2026 while operating activities used cash and financing activities generated Rs 6.7532 crore. Cash and cash equivalents ended the period at Rs 79.48 lakh, compared with Rs 47.70 lakh at March 31, 2025, following a reported net increase of Rs 31.79 lakh.

Short-term borrowings supplied the largest reported financing inflow in FY2026. The company recorded net proceeds of Rs 9.1115 crore from short-term borrowings, while fresh long-term borrowing proceeds of Rs 3.14 crore were exceeded by long-term borrowing repayments of Rs 3.7555 crore. Interest paid was Rs 1.7428 crore in FY2026, compared with Rs 1.1667 crore in FY2025, and appears within financing activities in the restated cash-flow statement.

The balance sheet records short-term borrowings of Rs 22.9993 crore at March 31, 2026, up from Rs 13.8877 crore at March 31, 2025 and Rs 9.4686 crore at March 31, 2024. Long-term borrowings fell to Rs 2.4402 crore at March 31, 2026 from Rs 3.0557 crore one year earlier, showing that the rise in the reported cash balance occurred alongside higher short-term borrowing.

What do the profit statement and cash-flow statement show together?

Vama Wovenfab’s profit statement shows rapid growth in revenue and profit, but the cash-flow statement reports that this did not translate into positive operating cash during FY2025 or FY2026. Revenue from operations increased by Rs 137.169 crore in FY2026, while total expenses increased by Rs 130.4463 crore to Rs 199.2849 crore and profit before tax rose to Rs 15.3322 crore.

Purchases of stock in trade increased to Rs 114.5632 crore in FY2026 from Rs 21.8673 crore in FY2025, while cost of materials consumed rose to Rs 89.0176 crore from Rs 48.4138 crore. Changes in inventories of work in progress, finished goods and stock in trade were reported as negative Rs 11.8537 crore in FY2026, compared with negative Rs 7.118 crore in FY2025; these profit-statement entries are distinct from the cash-flow statement’s Rs 7.994 crore inventory movement.

Conclusion

Vama Wovenfab’s restated statements show that reported profit rose from Rs 2.6299 crore in FY2024 to Rs 11.5451 crore in FY2026, while net operating cash moved from an Rs 6.9294 crore inflow to an Rs 6.3147 crore outflow. Inventory expansion, tax payments, receivables, payables and other working-capital lines were material parts of the reported cash-flow calculation, although the listed FY2026 movements do not reconcile to the reported operating subtotal.

The next disclosures to watch are inventory, trade receivables, trade payables, income-tax payments and short-term borrowings. At March 31, 2026, inventory stood at Rs 44.7785 crore and short-term borrowings at Rs 22.9993 crore, while FY2026 financing activities provided Rs 6.7532 crore of cash; a later update would show whether operating cash turns positive without further net financing support.