Venky's cash drops to Rs 1.13 crore after operating outflow

Venky's (India) Limited reported net cash used in operating activities of Rs 110.64 crore in the half year ended 30 September 2026, reducing cash and cash equivalents to Rs 1.13 crore from Rs 62.16 crore at the beginning of the year, despite profit before tax of Rs 90.18 crore.

How did Venky's operating cash flow change in the first half?

Venky's recorded an operating cash outflow of Rs 110.64 crore for the half year ended 30 September 2026, compared with an outflow of Rs 15.26 crore in the corresponding half year ended 30 September 2025. The outflow therefore increased by Rs 95.38 crore year on year, even as the company moved to a pre-tax profit of Rs 90.18 crore from a pre-tax loss of Rs 13.31 crore.

Venky's reported operating profit before changes in assets and liabilities of Rs 78.14 crore, against Rs 2.01 crore a year earlier. Its cash-flow adjustments included Rs 18.97 crore of depreciation and amortisation, Rs 23.95 crore of fair-value changes in biological assets, Rs 8.41 crore of interest income and Rs 6.13 crore of fair-value adjustment or gain on sale of current investments.

The operating outflow was the largest of Venky's three cash-flow categories during the six-month period. It exceeded the Rs 50.12 crore generated from investing activities and the Rs 0.51 crore used in financing activities, resulting in a net decrease of Rs 61.03 crore in cash and cash equivalents.

What working-capital movements affected Venky's cash flow?

Venky's cash flow reflected outflows in receivables, payables and provisions during the half year ended 30 September 2026. Trade receivables and other financial assets used Rs 77.43 crore, compared with Rs 36.54 crore in the corresponding 2025 period, while trade payables and other financial liabilities used Rs 75 crore after generating Rs 74.73 crore a year earlier.

Non-financial liabilities and provisions used a further Rs 54.47 crore of cash, compared with an outflow of Rs 34.97 crore in the prior-year half. These movements occurred alongside a reported operating profit before working-capital changes of Rs 78.14 crore, showing that the conversion of that measure into cash was affected by changes in operating balance-sheet items.

Some lines moved in the other direction. Inventories generated Rs 46.49 crore of cash in the 2026 half year, compared with a use of Rs 7.41 crore in the previous corresponding period, while biological assets used Rs 0.10 crore after generating Rs 22.43 crore a year earlier. Non-financial assets used Rs 4.80 crore, versus Rs 6.12 crore in the 2025 half year.

How did investing and financing cash flows offset the outflow?

Venky's generated Rs 50.12 crore from investing activities in the half year ended 30 September 2026, compared with Rs 5.69 crore in the prior-year half. Net proceeds from sales and purchases of mutual funds were Rs 60.10 crore, while payments to acquire property, plant, equipment and intangible assets totalled Rs 18.02 crore.

Interest received was Rs 7.93 crore, up from Rs 6.22 crore in the half year ended 30 September 2025, and proceeds from selling property, plant and equipment were Rs 0.11 crore. The Rs 50.12 crore investing inflow partly offset the Rs 110.64 crore operating outflow but was Rs 60.52 crore lower than that operating cash use.

Venky's used Rs 0.51 crore in financing activities, compared with Rs 3.66 crore in the previous corresponding period. The company reported Rs 8.85 crore of net proceeds from short-term borrowings and Rs 2.26 crore of proceeds from long-term borrowings, offset by Rs 7.53 crore of finance costs paid, Rs 1.82 crore of long-term borrowing repayments and Rs 1.33 crore of dividends paid.

What did Venky's first-half earnings show?

Venky's reported profit after tax of Rs 64.50 crore for the half year ended 30 September 2026, compared with a loss after tax of Rs 10.70 crore in the comparable 2025 period. Revenue from operations was Rs 2,144.49 crore, compared with Rs 1,666.70 crore a year earlier, while profit before tax rose to Rs 90.18 crore from a loss before tax of Rs 13.31 crore.

The Poultry and Poultry Products segment reported profit before tax and interest of Rs 26.37 crore, compared with a loss of Rs 63.97 crore in the prior-year half. Management said better operational efficiency and improved realisations in the quarter ended 30 September 2026 helped the segment, while noting that the second quarter is generally an off-season period because of festivals and fasting periods.

Animal Health Products recorded segment profit before tax and interest of Rs 53.37 crore, up from Rs 44.39 crore in the prior-year half. Oilseed reported Rs 31.82 crore, compared with Rs 20.23 crore a year earlier, although management said the segment's profitability was affected by volatile or high soya seed prices and lower realisations from de-oiled cakes.

What happened to Venky's cash balance and funding position?

Venky's ended the reported half year with Rs 1.13 crore of cash and cash equivalents, down from Rs 62.16 crore at the beginning of the year. The reported Rs 61.03 crore decline reflects Rs 110.64 crore used in operations, partly offset by Rs 50.12 crore generated through investing activities, with Rs 0.51 crore used in financing activities.

The accompanying balance sheet listed investments of Rs 159.37 crore and bank balances other than cash and cash equivalents of Rs 135.10 crore. It also showed trade receivables of Rs 595.51 crore, inventories of Rs 282.57 crore and biological assets of Rs 247.37 crore, all of which are relevant to the asset movements disclosed in the cash-flow statement.

Current borrowings were Rs 162.49 crore, compared with Rs 153.27 crore at 31 March 2026, while non-current borrowings were Rs 9.57 crore compared with Rs 9.50 crore. Total assets were Rs 2,253.58 crore, down from Rs 2,308.66 crore at 31 March 2026, and other equity was Rs 1,632.53 crore, compared with Rs 1,582 crore at year-end.

Conclusion

Venky's first-half figures show a return to profit alongside a substantially larger operating cash outflow. Pre-tax profit improved to Rs 90.18 crore and profit after tax reached Rs 64.50 crore, but changes involving receivables, payables, financial liabilities, non-financial liabilities and provisions coincided with Rs 110.64 crore of cash used in operations.

The next issue to watch is whether the cash conversion of receivables, payables, provisions and inventories changes after 30 September 2026. Management has identified improved efficiency and realisations in Poultry and Poultry Products, while its disclosed unresolved operating factors include volatile or high soya seed prices and lower de-oiled cake realisations in Oilseed.