Listed firms log record operating cash flow of ₹11.1 trn in FY24

Cross ₹10-trillion mark for first time; larger portion than before being used to retire long-term liabilities

- SACHIN P MAMPATTA

Indian companies are generating more cash than ever.

The net cash flow from listed firms’ operations hit a new high of ₹11.1 trillion in financial year 2023-24 (FY24), crossing the ₹10-trillion mark for the first time, according to the Centre for Monitoring Indian Economy (CMIE) data going back to 1990-91.

The FY24 figure represents a 19.3 per cent jump over the previous year, even as quite a few companies are yet to release their numbers. FY23 had seen a mere 2.1 per cent rise in net cash flow.

Cash flow measures the value of cash which moves in and out of the company during the course of its activities. Improved operating cash flow is considered a more reliable performance metric because cash flows are not affected by assumptions such as depreciation and amortisation which may distort final reported earnings.

The FY24 data takes into account 1,791 listed companies and excludes financial sector firms. On the other hand, the FY23 data was for 3,680 companies. Cash flow details are part of companies’ annual reports, which are typically available by the middle of the next financial year.

Lower raw material prices and resultant higher margins had a role to play in increased cash flows for FY24, Pankaj Pandey, head of research at ICICI Direct, told Business Standard.