Cash 360

The treasury cockpit — 13-week cash, EBITDA-to-FCF conversion, working-capital unlock, receivables, liquidity and balance-sheet strength.

Valvoline Cummins Private Limited · FY25 (Apr'24–Mar'25, audited)

Leading MNC / private aftermarket lubricants brand in India — single-digit share, premiumising

500 employees · 1 plant + regional DCs · 6 export markets

▲ Executive read· the answer, then the moves

Liquidity is sound at ₹450 Cr (≈ 8 weeks cover) on a net-debt-free balance sheet, but ₹38.8 Cr of working capital is trapped in receivables — and more in base-oil & finished-goods inventory. Pull DSO from 38d to 32d to fund the capital-light growth capex from cash while still returning sizeable dividends to the two parents.

5 of 5 headline metrics improving vs prior · still off target: Free Cash Flow ₹180 Cr vs ₹220 Cr, Cash Conversion Cycle 70d vs 60d, DSO (Days Sales Outstanding) 38d vs 32d

Do now — ranked by urgency

1
Base-oil cost & USD/INR — the swing factorAct now
Why it matters
Leverage Aramco sourcing synergy; hedge FX; sequence price actions.
What's driving it
Gross margin
Signal: Alert
FYI
~55-60% base oil is imported (Group II/III); crude + FX spikes compress margin before SKU repricing.
Act →
2
Unlock ₹38.8 Cr by pulling DSO to the 32d targetWatch
Why it matters
Every day of DSO above 32d ties up working capital; closing the gap releases ≈ ₹38.8 Cr of one-time cash.
What's driving it
DSO 38d vs 32d target
Overdue >60d = ₹30.0 Cr of ₹246 Cr AR
FYI
Normalizing laggard divisions to 35d DSO releases ≈ ₹17.1 Cr
Owner: Treasury
Work the overdue book →▤ open the overdue receivables
3
OEM & DEF are margin-dilutiveWatch
Why it matters
Grow retail / synthetic faster than DEF / OEM to protect blended margin.
What's driving it
Segment margin mix
Signal: Alert
FYI
OEM & genuine oil (8.5% EBITDA) and DEF are LOW-margin and rising in the mix; retail & synthetic carry the margin.
Act →
4
Working-capital & freight optimization — PlannedWatch
Why it matters
Unbanked EBITDA & capex-ROI until captured.
What's driving it
₹12 Cr run-rate targeted
Signal: Savings program
FYI
Inventory / DSO discipline + freight & warehousing efficiency.
Owner: CFO
Act →

🛢 Premiumization-led growthStep 5 of 7 · base-oil cost, working capital, net cash◀ Finance 360 Segments & Group 360 ▶All journeys

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↗ Where this connects — act / drill across

▤Evidence· open the overdue-invoice list 🧩Customer Master· term conflicts driving AR 👥Customer 360· DSO by account 🚪Shareholder Value· returns & shareholder value

Liquidity

₹450 Cr

≈ 8 weeks cover

Free cash flow

₹180 Cr

64% EBITDA conversion

Cash conversion cycle

70d

DSO 38 + DIO 77 − DPO 45

Working-capital unlock

₹38.8 Cr

DSO 38→32d target

Exhibit 1

13-week direct cash flow forecast

Net weekly cash (bars) and ending cash (line) vs. ₹60 Cr minimum. Forecast trough: ₹111 Cr.

Above minimum

₹120 Cr

Opening cash

₹741 Cr

13-wk collections

₹732 Cr

13-wk disbursements

₹129 Cr

Closing cash

Exhibit 2

EBITDA → Free cash flow

₹281 Cr EBITDA converts to ₹180 Cr FCF (64%).

Exhibit 3

Cash collected

Monthly, ₹ Cr.

Cash conversion cycle

Working-capital days

DSO — receivables38d

DIO — inventory77d

DPO — payables (offset)(45d)

Cash conversion cycle70d

Where cash is trapped

Working-capital cash unlock

₹17.1 Cr

Normalizing laggard divisions to 35-day DSO releases ~₹17.1 Cr one-time.

All Fleet40d

₹8.5 Cr

Ultramax45d

₹6.6 Cr

ProFleet38d

₹2.1 Cr

Collections

AR aging

Total AR ₹246 Cr

Current days₹140 Cr

1-30 days₹55 Cr

31-60 days₹21 Cr

61-90 days₹18 Cr

90+ days₹12 Cr

Overdue (>60d) = ₹30.0 Cr.

Exhibit 4

Collections priority

Highest DSO first.

Account	Revenue	DSO	Credit risk
South Asia export distributors	₹120 Cr	52d	Medium
Construction, mining & genset OEMs	₹200 Cr	48d	Medium
Tractor & agri OEMs / dealers	₹150 Cr	46d	Medium
Industrial B2B accounts	₹260 Cr	45d	Low
Fleet operators (CV)	₹340 Cr	42d	Medium
National distributor network (~450)	₹900 Cr	40d	Medium
Tata Motors & OEM tie-ups	₹180 Cr	34d	Low

Exhibit 5

Supplier DPO

Working-capital lever.

Supplier	Spend	DPO	OTIF	Risk
Imported base oil (Group II/III, Aramco)	₹900 Cr	45d	95%	High
Additive packages (Lubrizol / Infineum / Afton / Oronite)	₹330 Cr	50d	94%	Medium
Domestic base oil (Group I/II)	₹220 Cr	40d	93%	Medium
Packaging (HDPE cans, drums, metal)	₹160 Cr	48d	92%	Low
Freight & warehousing	₹130 Cr	42d	91%	Medium
Brand royalty (Valvoline) + CIL service charge	₹70 Cr	30d	99%	Low