SMEs' operating cash flow fell 69% in FY24; sales and profits outperformed

Amid increased scrutiny of price action in the SME segment by regulators and investors alike, a looks at their fundamentals in a three-part series. Part-1 examines sharp decline in operating cash flow

The cash flow from operating activities for small and medium enterprises (SMEs) listed on stock exchanges has more than halved (fallen 69 per cent) in the financial year 2023-24 (FY24) even as indices tracking the segment have been surg­ing.

SMEs’ operating cash flow for FY24 has been the lowest since the pandemic began, even as the BSE SME IPO index and the National Stock Exchange (NSE)’s Nifty SME EMERGE Index have roughly doubled in value during the period, and continued to hit new highs in the current financial year. These companies are listed separately from the main stock