Thejo Engineering’s record carries a clean audit trail, zero promoter pledges, and cumulative operating cash flow that covers reported profit over a decade. Three things deserve attention: receivables are growing faster than revenue with flat provisions, annual cash conversion has weakened to 0.80x in FY26, and the “Other” segment swung to a negative PBIT margin in FY26.
Key findings
- Receivables are rising faster than revenue, with older buckets expanding
Minor- Consolidated trade receivables grew 28.8% to ₹174.18 crore in FY26, while revenue rose 14.3%. Unbilled revenue within receivables climbed from ₹15.26 crore to ₹23.58 crore, and receivables aged 1-2 years nearly doubled to ₹2.11 crore. The provision for expected credit losses stayed flat at ₹80 lakhs, and the company reports no disputed receivables. - Operating cash flow covers profit over the cycle but is volatile year-to-year
Minor- Cumulative CFO of ₹376 crore exceeded cumulative PAT of ₹323 crore over the ten years to FY26. Annual CFO/PAT swung from 1.78x in FY21 to 0.64x in FY22 and 0.80x in FY26. The board approved a ₹40 crore second-phase expansion for FY27 and recommended a ₹5 per share dividend, while ROCE declined from 28.37% in FY24 to 20.01% in FY26.
What to watch
- Capex programme. Completion of the ₹40 crore second-phase manufacturing expansion during FY2026-27.
Bottom line: This is a long-standing, net-cash business with a clean audit record and zero promoter pledges. The risk sits in two places: receivables rising faster than revenue with older buckets expanding, and a three-year slide in ROCE that the ₹40 crore expansion must arrest. Watch whether the overseas units stabilise and whether the ₹40 crore expansion earns a return that arrests the three-year slide in ROCE.