Zen Technologies reports Rs 302.89 crore operating outflow

Zen Technologies Limited reported Rs 302.89 crore of net cash used in operating activities for the half year ended 30 September 2026, despite profit before tax of Rs 182.95 crore. The outflow was principally driven by Rs 249.18 crore absorbed by trade receivables and Rs 157.26 crore by inventories, alongside Rs 52.72 crore of income-tax payments.

Why did Zen Technologies use operating cash?

Zen Technologies used Rs 302.89 crore in operating activities because working-capital movements and tax payments exceeded the cash generated before those items. Operating profit before working-capital changes was Rs 188.70 crore in the six months to 30 September 2026, after adjustments including Rs 16.58 crore of depreciation and amortisation, Rs 10.80 crore of warranty provision, and Rs 4.33 crore of share-based payments.

The group then reported Rs 250.17 crore of cash used in operations before income tax, followed by Rs 52.72 crore of income-tax payments. This resulted in the reported Rs 302.89 crore net cash used in operating activities under the indirect method prescribed by Indian Accounting Standard 7, or Ind AS 7, which governs cash-flow statements.

The year ended 31 March 2026 showed Rs 244.60 crore of net cash generated from operating activities, compared with the Rs 302.89 crore outflow in the half year to September 2026. The periods differ in length, but the direction changed from an inflow to an outflow as cash was absorbed by working-capital accounts.

How did receivables and inventory affect Zen Technologies cash flow?

Zen Technologies' trade receivables consumed Rs 249.18 crore of cash and inventories consumed Rs 157.26 crore in the half year ended 30 September 2026. These were the two largest adverse working-capital movements in the cash-flow statement and together represented Rs 406.44 crore of cash use.

The cash-flow statement records the receivables increase as Rs 249.18 crore, while the balance-sheet trade-receivables balance rose to Rs 478.88 crore at 30 September 2026 from Rs 224.01 crore at 31 March 2026. The cash-flow line is the working-capital movement reported during the period, whereas the balance sheet gives the account balance at each reporting date.

Inventories rose to Rs 342.59 crore at 30 September 2026 from Rs 188.19 crore at 31 March 2026. The cash-flow statement recorded a Rs 157.26 crore inventory-related cash outflow, compared with a Rs 71.08 crore outflow for the year ended 31 March 2026.

Other working-capital items partly offset the receivables and inventory movements. Other current assets generated Rs 14.00 crore, trade payables generated Rs 6.47 crore, and other financial assets generated Rs 2.66 crore, while other non-current financial assets used a further Rs 16.37 crore.

How does Zen Technologies cash flow compare with its earnings?

Zen Technologies reported Rs 182.95 crore of profit before tax and Rs 133.73 crore of net profit for the half year ended 30 September 2026, while operating cash flow was negative Rs 302.89 crore. The difference reflects non-cash adjustments, working-capital changes and Rs 52.72 crore of tax paid in the cash-flow statement.

Revenue from operations was Rs 486.77 crore in the half year, up from Rs 331.79 crore in the half year ended 30 September 2025. Profit before tax increased from Rs 159.34 crore to Rs 182.95 crore, while net profit increased from Rs 114.98 crore to Rs 133.73 crore over the respective six-month periods.

The profit-and-loss statement also recorded a Rs 89.13 crore reduction in inventories of finished goods, work in progress and stock in trade within expenses. That line measures the accounting movement in production-related inventory costs, while the cash-flow statement separately reports the cash effect of changes in inventory balances.

What does Zen Technologies' balance sheet show about working capital?

Zen Technologies had Rs 1,828.88 crore of current assets at 30 September 2026, compared with Rs 1,554.17 crore at 31 March 2026. The September balance included trade receivables of Rs 478.88 crore, inventories of Rs 342.59 crore and cash and cash equivalents of Rs 260.00 crore.

Current liabilities increased to Rs 219.27 crore from Rs 175.47 crore over the same period. Trade payables due to micro enterprises and small enterprises rose to Rs 22.78 crore from Rs 17.38 crore, while dues to other creditors rose to Rs 33.04 crore from Rs 31.94 crore.

The group also reported Rs 304.63 crore of other current financial assets at 30 September 2026, down from Rs 697.60 crore at 31 March 2026. This closing-balance change differs from the Rs 2.66 crore inflow classified as a change in other financial assets in the cash-flow statement, which presents movements through a separate classification.

Zen Technologies operates in one reported segment, Defence and Homeland, and disclosed orders on hand of Rs 1,375.70 crore at 30 September 2026. The Audit Committee reviewed the results and the Board approved them on 31 October 2026.

Conclusion

Zen Technologies' six-month results show increased revenue and profit alongside a substantial operating-cash outflow. The Rs 302.89 crore use of operating cash was chiefly associated with Rs 249.18 crore absorbed by receivables and Rs 157.26 crore by inventory, while tax payments added Rs 52.72 crore to the period's cash requirement.

The next disclosed matters are the pending acquisition of 51.98% of Cogknit Semantics Private Limited for Rs 135.15 crore, approved on 17 October 2026 and subject to customary conditions precedent, and the insurance assessment following the 18 October 2026 fire at subsidiary Unistring Tech Solutions Private Limited. Zen Technologies estimated preliminary damage to fixed assets and inventory at about Rs 4.00 crore, while the final loss and recovery remain subject to the surveyor's assessment.