Veejay Lakshmi Inventory Build Leads to Rs 1.73 Crore Cash Outflow

Veejay Lakshmi Engineering Works Limited reported a Rs 1.73 crore net operating cash outflow for the half year ended 30 September 2026, as inventories increased by Rs 8.27 crore to Rs 19.48 crore. The stock build outweighed a Rs 1.74 crore release from trade receivables, even as the standalone income statement showed Rs 48.25 lakh profit before tax.

How did inventory drive Veejay Lakshmi’s operating cash outflow?

Inventory was the principal cash use in the half year ended 30 September 2026. Veejay Lakshmi recorded an Rs 8.27 crore increase in inventories in its cash-flow statement, compared with an Rs 1.38 crore cash release from inventories in the half year ended 30 September 2025. That change in direction was the largest disclosed working-capital movement across the two periods.

The balance sheet supports the movement shown in the cash-flow statement. Inventories rose to Rs 19.48 crore on 30 September 2026 from Rs 11.21 crore on 31 March 2026. The Rs 8.27 crore increase was larger than the reported Rs 1.73 crore operating cash outflow because receivables and several liability balances generated cash during the period.

Veejay Lakshmi reported net cash used in operating activities of Rs 1.73 crore after tax paid of Rs 10.57 lakh. The result shows that the Rs 48.25 lakh pre-tax profit in the standalone income statement did not translate into positive operating cash flow during the six months, principally because additional cash was held in stock.

What working-capital changes partly offset the inventory build?

A reduction in trade receivables partly offset the inventory increase. Veejay Lakshmi recorded a Rs 1.74 crore cash inflow from trade receivables for the half year ended 30 September 2026, versus an Rs 1.83 crore cash outflow from receivables in the corresponding prior-year half.

Trade receivables declined to Rs 4.83 crore at 30 September 2026 from Rs 6.37 crore at 31 March 2026. The balance-sheet decrease aligns with the Rs 1.74 crore cash-flow release and contrasts with the inventory balance, which increased by Rs 8.27 crore over the same six-month period.

Other operating liability movements also provided cash. Trade payables increased by Rs 1.97 crore, other financial liabilities increased by Rs 1.79 crore, other current liabilities rose by Rs 8.43 lakh and provisions increased by Rs 19.84 lakh. Against these inflows, loans used Rs 3.23 lakh and other current assets used Rs 27.36 lakh.

Did Veejay Lakshmi return to pre-tax profit?

Veejay Lakshmi returned to a pre-tax profit of Rs 48.25 lakh for the half year ended 30 September 2026, compared with a pre-tax loss of Rs 3.52 crore in the half year ended 30 September 2025. Net profit after tax was Rs 7.58 lakh, against a net loss of Rs 3.59 crore a year earlier.

Revenue from operations declined to Rs 37.62 crore from Rs 39.80 crore, while total income fell to Rs 39.41 crore from Rs 41.85 crore. Total expenses declined by a larger amount, to Rs 39.59 crore from Rs 45.37 crore, which was associated with the change from the prior-year pre-tax loss to the reported pre-tax profit.

Finance cost rose to Rs 1.20 crore from Rs 1.18 crore, while depreciation and amortisation fell to Rs 1.07 crore from Rs 1.25 crore. The cash-flow statement separately reports interest paid of Rs 1.20 crore, and depreciation is included among adjustments to profit in calculating operating cash flow.

Which segment accounted for the revenue change?

The Textile Division accounted for the revenue decline between the two half-year periods. Textile Division revenue was Rs 29.55 crore for the half year ended 30 September 2026, down from Rs 31.75 crore a year earlier, a decrease of Rs 2.20 crore.

Engineering Division revenue was largely unchanged at Rs 8.07 crore, compared with Rs 8.06 crore in the prior-year half. Textile remained the larger disclosed business by revenue, contributing Rs 29.55 crore of the Rs 37.62 crore revenue from operations reported by Veejay Lakshmi.

Both divisions reported smaller segment losses before interest and tax. Engineering Division loss narrowed to Rs 20.16 lakh from Rs 61.73 lakh, while Textile Division loss narrowed to Rs 29.84 lakh from Rs 2.93 crore. Total segment loss was Rs 50 lakh, compared with Rs 3.54 crore in the corresponding prior-year half.

Segment assets increased at both businesses as at 30 September 2026. Textile Division assets were Rs 44.24 crore, up from Rs 40.69 crore at 30 September 2025, while Engineering Division assets increased to Rs 15.09 crore from Rs 11.14 crore. The filing does not allocate the Rs 19.48 crore inventory balance between the Textile and Engineering divisions.

How did financing and cash balances change during the period?

Veejay Lakshmi reported Rs 1.71 crore of net cash generated from financing activities in the half year ended 30 September 2026. The cash-flow statement shows a Rs 3.13 crore increase in short-term borrowings, a Rs 21.87 lakh outflow relating to long-term borrowings, and Rs 1.20 crore of interest paid.

Short-term borrowings on the balance sheet increased to Rs 13.25 crore at 30 September 2026 from Rs 10.12 crore at 31 March 2026. Cash and cash equivalents closed at Rs 3.86 lakh, compared with Rs 2.33 lakh at the beginning of the period, a rise of Rs 1.53 lakh.

Total assets rose to Rs 65.70 crore at 30 September 2026 from Rs 57.99 crore at 31 March 2026. Total equity increased to Rs 9.77 crore from Rs 9.03 crore, while current liabilities increased to Rs 28.82 crore from Rs 22.71 crore. Veejay Lakshmi’s board reviewed and approved the unaudited standalone results on 10 November 2026.

Conclusion

Veejay Lakshmi’s half-year results show a divergence between earnings and operating cash flow. The reported Rs 48.25 lakh pre-tax profit followed a Rs 3.52 crore loss a year earlier, but an Rs 8.27 crore inventory increase resulted in Rs 1.73 crore of cash used in operations despite an Rs 1.74 crore receivables release.

The unresolved point is whether the Rs 19.48 crore inventory balance is reduced in later periods and converted into sales and collections. The filing also does not divide that inventory between the Textile and Engineering divisions, while short-term borrowings had increased to Rs 13.25 crore as at 30 September 2026.