Vivid Electromech H1 PAT rises 38.5% as cash flow turns negative

Vivid Electromech Limited reported H1 FY27 profit after tax of Rs 13.08 crore, up 38.5% year on year, but net operating cash flow was negative Rs 55.49 crore for the half year ended September 30, 2026, as inventory, short-term advances and supplier settlements absorbed cash.

How did Vivid Electromech perform in H1 FY27?

Vivid Electromech reported higher revenue and profit in H1 FY27, with revenue from operations rising 29.7% year on year to Rs 91.53 crore from Rs 70.57 crore in H1 FY26. Total income increased 30.0% to Rs 92.15 crore from Rs 70.89 crore. Management attributed revenue growth to execution of customer orders across its key industries.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 37.5% to Rs 19 crore from Rs 13.82 crore. The EBITDA margin increased to 20.62% from 19.49%, while profit after tax, or PAT, reached Rs 13.08 crore versus Rs 9.44 crore a year earlier. Management said product mix, operating leverage and execution efficiencies contributed to the higher profitability.

Vivid Electromech’s sales mix remained concentrated in low-voltage panels, which supplied 82% of H1 FY27 revenue, while medium-voltage panels contributed 17%. Data centers were the largest end market at about 52% of revenue, followed by infrastructure and real estate at 24%, industrial manufacturing at 17%, and solar and other industries at 7%.

Why did Vivid Electromech’s operating cash flow turn negative?

Vivid Electromech’s net cash flow from operating activities was negative Rs 55.49 crore in H1 FY27 because cash was absorbed by inventory, short-term advances, lower trade payables, other bank balances and income-tax payments. The company said its elevated near-term working-capital requirement reflected procurement and execution of ongoing customer orders.

Inventory rose to Rs 17.29 crore on September 30, 2026, from Rs 6.66 crore on March 31, 2026, an increase of Rs 10.63 crore. Management said it procured material ahead of scheduled project execution and dispatches. Trade receivables rose more modestly, to Rs 119.75 crore from Rs 116.5 crore, which the company described as broadly stable.

The reduction in trade payables also contributed to the cash outflow because Vivid Electromech settled supplier balances during the period. Short-term borrowings rose to Rs 22.51 crore to support working-capital needs, even as total borrowings declined to Rs 24.27 crore from Rs 33.30 crore due to long-term debt repayment.

Management said operating cash flow should improve over coming quarters as projects are executed and customer collections materialise. That is management’s expectation rather than a reported outcome: the H1 cash result shows that growth in orders and sales required funding for materials, advances and supplier settlements.

What is driving Vivid Electromech’s working-capital requirement?

Vivid Electromech’s working-capital requirement is being driven by a Rs 307 crore executable order book as of October 26, 2026, and project cycles ranging from two to nine months. Data-center orders accounted for Rs 115 crore, metro rail for Rs 46 crore and other industries for Rs 146 crore, requiring procurement before project delivery and customer payment milestones.

The company served 71 customers in H1 FY27, with average revenue per customer of about Rs 1.28 crore. Maharashtra supplied 77% of revenue, domestic business accounted for about 91%, and exports contributed 9%. Export revenue was about Rs 8.1 crore in H1 FY27, compared with Rs 2.5 crore for the whole of FY26.

In the call, management said receivables of Rs 119.75 crore at September 2026 were broadly comparable with the Rs 116.5 crore March balance. The chairman said the company had dispatched more than Rs 91 crore plus goods and services tax during the half year and had recovered about Rs 120 crore over the six months, although no detailed collection schedule was disclosed.

Management also described the payment structure on data-center projects as a factor. It said 10% can be retained by customers, while another 20% is linked to milestones, including commissioning and the final integrated test. To reduce the resulting delay, Vivid Electromech said it had enhanced non-fund-based banking limits and begun processing performance bank guarantees.

How much is Vivid Electromech investing in expansion?

Vivid Electromech recorded investing cash outflow of Rs 28.23 crore in H1 FY27 and capital expenditure of about Rs 34 crore, mainly for manufacturing expansion and related investments. The investing outflow included property, plant and equipment, intangible assets and capital work-in-progress, partly offset by other investing inflows.

The Ambernath manufacturing facility’s first phase had reached equipment installation and operational-readiness assessment by the October 28, 2026 call. Subject to statutory approvals, management expected commercial operations by the end of November 2026. The completed facility is intended to lift installed capacity from 7,500 verticals a year to 22,500 verticals a year.

Management told analysts that phase one would add roughly 5,000 verticals of capacity, with first dispatches expected from the end of November 2026. It said phase two, excluding the office and experience-center block, was expected by December-end, while reaching full capacity utilisation could take one to one-and-a-half years.

The company had used Rs 81.64 crore of Rs 104.56 crore in fresh initial public offering proceeds as of September 30, 2026, leaving Rs 22.92 crore unutilised. Shareholders approved reallocation of Rs 9 crore from Ambernath manufacturing-facility capital expenditure to working-capital requirements at the 36th annual general meeting on August 25, 2026.

Conclusion

Vivid Electromech’s H1 FY27 results combine 29.7% revenue growth with a faster 38.5% rise in PAT and a 1.13-percentage-point EBITDA-margin increase. However, negative operating cash flow of Rs 55.49 crore shows that inventory procurement, advances and supplier settlements absorbed cash during the period despite the higher reported profit.

The next items to watch are the expected end-November 2026 start of Ambernath phase-one commercial operations, the pace of capacity ramp-up toward 22,500 verticals annually, and whether collections and revised payment arrangements reduce working-capital pressure. Management also said it would prioritise execution of its Rs 307 crore order book before pursuing orders for later quarters.