Three Semiconductor Companies, One Cash Flow Question

This matters because a company can record a sale today, show a profit in its profit and loss statement, and still wait months to receive the money. At the same time, it may have already paid suppliers and bought components for future orders. This is where working capital becomes important.

Kaynes Technology, Sahasra Electronic Solutions and Aimtron Electronics are all growing in the electronics manufacturing space. Their FY26 numbers provide an interesting comparison. All three reported profits, but their operating cash flows were negative. The difference becomes clearer when we look at receivable days, inventory days and operating cash flow against profit.

Receivables: when a sale is not yet cash

Receivables are amounts that customers still have to pay.

This is common in manufacturing. A company may manufacture and deliver products first and collect the money later. That is not necessarily a problem. The issue is how long the wait becomes.

Among the three companies, Kaynes had 154 receivable days in FY26. Aimtron was at 164 days, while Sahasra was lower at 112 days. In simple terms, the numbers suggest that cash collection is taking a meaningful amount of time for all three companies.

For Aimtron, receivable days were still high at 164 days in FY26, although lower than the previous year. Kaynes moved in the opposite direction, with consolidated debtor days increasing from 77 in FY25 to 154 in FY26. This is a significant change and deserves attention because more money was tied up with customers.

The important point is that high receivable days do not automatically mean customers will not pay. Investors need to see whether the receivables are eventually collected and whether the number starts coming down.

Inventory: cash sitting inside the business

Inventory is another major use of cash for an electronics manufacturer.

Companies need components and raw materials before they can manufacture products. A growing company may also build inventory because it expects higher production or wants to avoid supply shortages.

The problem starts when inventory grows faster than the business.

In FY26, inventory days were 169 for Kaynes, 182 for Sahasra and 176 for Aimtron. Sahasra therefore had the highest inventory days of the three, although the gap between the companies was not very large.

For Sahasra, FY26 standalone inventories were about ₹40.3 crore and trade receivables about ₹38.0 crore against revenue of ₹123.6 crore. For Aimtron, consolidated inventory was about ₹103.2 crore while trade receivables were about ₹135.5 crore. These numbers show why growth can consume cash even when the income statement looks healthy.

The bigger test: profit versus operating cash flow

This is where the comparison becomes more interesting.

Kaynes made around ₹364 crore of PAT in FY26, but generated negative ₹600 crore from operations. Sahasra reported PAT of about ₹19.7 crore, but operating cash flow was negative ₹16.4 crore. Aimtron reported PAT of about ₹46 crore, but operating cash flow was negative ₹40 crore.

The message is simple. None of the three companies converted FY26 profit into positive operating cash flow on the basis used here.

The gap was particularly large for Kaynes. Its FY26 consolidated cash flow statement shows that an increase in trade receivables of about ₹1,024 crore and an increase in inventory of about ₹289 crore were major cash uses. Higher other current assets also absorbed cash, while higher trade payables provided some support.

This is important because negative operating cash flow does not automatically mean the business is weak. A fast growing company can have negative cash flow because it is putting money into working capital before it receives the cash from customers. The real question is whether that cash comes back later.

Source: company FY26 filings

What the Numbers Tell Us

The answer is not the same for every company.

Kaynes has the largest absolute cash flow gap, and its sharp increase in consolidated receivable days is something investors should monitor closely. At the same time, the company is much larger and its business is expanding across several areas, so working capital needs can rise during periods of rapid growth.

Sahasra has lower receivable days than the other two, but its inventory days remain high and operating cash flow is still negative. The next question is whether inventory and receivables improve as the company scales.

Aimtron has the highest receivable days among the three at 164 days, along with 176 inventory days. Its operating cash flow was also negative ₹40 crore. However, its revenue grew sharply in FY26, reaching about ₹301 crore, while PAT increased to about ₹46 crore.

This is why looking at only one year's cash flow can be misleading. Growth, order timing, customer payment cycles and inventory purchases can all affect a single year's number.

What Comes Next

The key test is whether cash conversion improves.

For these three companies, investors should watch whether receivable days start falling, whether inventory starts growing more slowly than revenue and whether operating cash flow turns positive.

A company that reports higher profit but continues to consume large amounts of operating cash for several years may need increasing external funding to support its growth. That can eventually become a bigger issue.

On the other hand, if receivables are collected, inventory gets converted into sales and operating cash flow improves, the earlier cash outflow can look much more reasonable in hindsight.

For Kaynes, this improvement will be especially important because of the scale of its working capital investment. For Sahasra and Aimtron, the same principle applies, although the absolute amounts are much smaller.

The broader lesson from these three companies is that profit is only one part of the story. In a working capital heavy business like electronics manufacturing, investors also need to ask where the cash is going.

FY26 shows that Kaynes, Sahasra and Aimtron all reported profits while their operations consumed cash. That does not by itself make their growth unsustainable. But it does make cash conversion an important number to track.

For an investor, the next few quarters may therefore be just as important as the FY26 earnings themselves. The question is no longer only how fast these companies can grow. It is whether that growth eventually turns into cash.

Sources

FY26 integrated filings for Kaynes Technology, Sahasra Electronic Solutions and Aimtron Electronics on the NSE corporate archives, and the consolidated company pages on Screener for each of the three businesses.