Vivekanand Cotsipn projects 41-day working-capital cycle

Vivekanand Cotsipn projects that its working-capital cycle will reach 41 days in FY28, from 29 days in FY26, as inventory rises to 30 days, receivables reach 14 days and trade-payable days fall to three. Net working capital is projected at Rs 69.75 crore at March 31, 2028, against Rs 35.42 crore at March 31, 2026.

Why is Vivekanand Cotsipn projecting a 41-day working-capital cycle?

Vivekanand Cotsipn projects a 41-day working-capital cycle for the financial year ending March 31, 2028, 12 days above the 29 days shown for FY26 in its holding-level table. The table records a cycle of 20 days in FY24, 24 days in FY25, 29 days in FY26, 37 days in projected FY27 and 41 days in projected FY28.

A working-capital cycle measures the period in which cash tied up in inventory and customer credit returns through collections after allowing for supplier credit. Vivekanand Cotsipn’s 41-day projection results from three disclosed assumptions: inventory days increase from 20 in FY26 to 30 in FY28, trade-receivable days rise from 12 to 14, and trade-payable days decline from four to three.

The projected expansion therefore requires Vivekanand Cotsipn to carry more raw material and finished goods while providing slightly longer credit to selected customers. Supplier credit offers limited offset because payable days are projected at two in FY27 and three in FY28, compared with 14 days in FY25 and 10 days in FY24.

How much working capital does Vivekanand Cotsipn expect to need?

Vivekanand Cotsipn projects net working capital, defined as total current assets less total current liabilities, of Rs 69.75 crore at March 31, 2028. This is Rs 34.33 crore above the Rs 35.42 crore reported at March 31, 2026, after a projected requirement of Rs 59.69 crore at March 31, 2027.

Inventory is the largest projected current-asset category at Rs 46.37 crore in FY28, equal to about 58% of projected total current assets of Rs 80.20 crore. Trade receivables are projected to increase by Rs 11.58 crore between FY26 and FY28, while short-term loans and advances are estimated to rise from Rs 1.37 crore to Rs 5.44 crore.

Current liabilities are also projected to increase between FY26 and FY28, although by less than current assets in absolute terms. Trade payables are projected at Rs 4.23 crore in FY28, versus Rs 1.87 crore in FY26, while other current liabilities and short-term provisions are estimated at Rs 2.87 crore and Rs 3.35 crore, respectively.

What assumptions are behind the longer working-capital cycle?

Vivekanand Cotsipn attributes the projected increase in inventory days from 20 in FY26 to 27 in FY27 and 30 in FY28 to a strategy of maintaining inventory equivalent to about one month of operational requirements. The company says the higher stockholding is intended to reduce exposure to raw-material price fluctuations, avoid procurement-related supply disruptions and support continuous production and customer-order fulfilment.

The FY27 and FY28 inventory assumptions differ from the historical pattern of 23 days in FY24, 29 days in FY25 and 20 days in FY26. Vivekanand Cotsipn says frequent open-market procurement historically exposed it to raw-material price volatility, making a larger stock buffer part of its projected operating plan.

Vivekanand Cotsipn projects receivable days of 12 in FY27 and 14 in FY28, compared with six days in FY24 and 12 days in FY26. It says the additional customer credit is to be selectively provided to customers with established payment histories; export collections are generally backed by letters of credit, or LCs, and may take 30 to 90 days depending on commercial terms, shipment schedules and banking procedures.

Payable-day assumptions move in the opposite direction. Vivekanand Cotsipn expects two payable days in FY27 and three in FY28 because it plans timely payments to key suppliers to secure commercial terms and continuity of critical raw-material supply. Its disclosed comparison shows related-party payment periods of four to 17 days, against three to four days for non-related parties, while related-party collection periods are two to five days, against 10 to 13 days for non-related parties.

How does Vivekanand Cotsipn plan to fund the FY28 requirement?

Vivekanand Cotsipn plans to fund its FY28 net working-capital requirement of Rs 69.75 crore through Rs 43.57 crore of borrowings, Rs 20.18 crore of internal accruals and Rs 6 crore of initial public offering, or IPO, proceeds. Borrowings represent about 62% of the stated FY28 funding mix, compared with about 70% in projected FY27.

Vivekanand Cotsipn proposes to use Rs 11 crore of net IPO proceeds for working-capital requirements across FY27 and FY28. As of April 30, 2026, Rs 41.35 crore was outstanding under sanctioned fund-based working-capital facilities of Rs 48 crore.

The funding plan depends on Vivekanand Cotsipn generating the projected internal accruals, which increase from Rs 3.01 crore in FY26 to Rs 20.18 crore in FY28. The company states that any funding shortfall will be met through internal accruals; if the IPO is delayed, it may draw overdraft, cash-credit, term-loan or unsecured-loan facilities and repay financing used for issue objects from net proceeds.

How does Vivekanand Cotsipn compare with disclosed peers?

Vivekanand Cotsipn’s projected FY28 working-capital cycle of 41 days is below the FY26 cycles disclosed for Lagma Spintex Limited and Deepak Spinners Limited. Lagma Spintex reported 129 days in FY26 and Deepak Spinners reported 54 days, while Vivekanand Cotsipn’s holding-level table shows 29 days for FY26.

The disclosed FY26 comparison also shows lower inventory days at Vivekanand Cotsipn, at 20 days, than Lagma Spintex’s 101 days and Deepak Spinners’ 60 days. Vivekanand Cotsipn’s 12 receivable days were below 41 and 24 days, respectively, while its four payable days were below their 13 and 30 days.

The peer figures are company-level holding-day disclosures and do not establish identical product, customer or supplier conditions. Vivekanand Cotsipn’s FY28 projection depends on holding inventory at 30 days, collecting customer balances within 14 days and retaining supply continuity while paying key suppliers within three days.

Conclusion

Vivekanand Cotsipn’s projected 41-day working-capital cycle is driven by a planned increase in operating buffers and customer credit alongside limited supplier credit. Between FY26 and FY28, inventory is projected to increase by Rs 21.96 crore and trade receivables by Rs 11.58 crore, lifting net working capital by Rs 34.33 crore.

The disclosed plan makes FY27 inventory of 27 days and payable days of two key interim measures to watch. Vivekanand Cotsipn’s board approved the FY27 and FY28 working-capital projections on May 30, 2026, while the company states that the issue objects have not been appraised by a bank, financial institution or other independent third party.