Man Infraconstruction (NSE:MANINFRA) Has A Rock Solid Balance Sheet

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility of prices, but whether you will suffer a permanent loss of capital.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that Man Infraconstruction Limited (NSE:MANINFRA) does have debt on its balance sheet. But the real question is whether this debt is making the company risky.

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Why Does Debt Bring Risk?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. By replacing dilution, though, debt can be an extremely good tool for businesses that need capital to invest in growth at high rates of return. When we examine debt levels, we first consider both cash and debt levels, together.

What Is Man Infraconstruction's Debt?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Man Infraconstruction had ₹247.3m of debt, an increase on ₹184.0m, over one year. However, its balance sheet shows it holds ₹6.53b in cash, so it actually has ₹6.29b net cash.

How Healthy Is Man Infraconstruction's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Man Infraconstruction had liabilities of ₹3.13b due within 12 months and liabilities of ₹210.5m due beyond that. Offsetting these obligations, it had cash of ₹6.53b as well as receivables valued at ₹8.51b due within 12 months. So it can boast ₹11.7b more liquid assets than total liabilities.

This excess liquidity suggests that Man Infraconstruction is taking a careful approach to debt. Because it has plenty of assets, it is unlikely to have trouble with its lenders. Succinctly put, Man Infraconstruction boasts net cash, so it's fair to say it does not have a heavy debt load!

Check out our latest analysis for Man Infraconstruction

Also good is that Man Infraconstruction grew its EBIT at 10% over the last year, further increasing its ability to manage debt. There's no doubt that we learn most about debt from the balance sheet. But it is Man Infraconstruction's earnings that will influence how the balance sheet holds up in the future. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

Finally, a business needs free cash flow to pay off debt; accounting profits just don't cut it. Man Infraconstruction may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt. During the last three years, Man Infraconstruction generated free cash flow amounting to a very robust 86% of its EBIT, more than we'd expect. That positions it well to pay down debt if desirable to do so.

Summing Up

While it is always sensible to investigate a company's debt, in this case Man Infraconstruction has ₹6.29b in net cash and a decent-looking balance sheet. And it impressed us with free cash flow of -₹120m, being 86% of its EBIT. So is Man Infraconstruction's debt a risk? It doesn't seem so to us. The balance sheet is clearly the area to focus on when you are analysing debt. However, not all investment risk resides within the balance sheet - far from it. For instance, we've identified 2 warning signs for Man Infraconstruction (1 can't be ignored) you should be aware of.

If you're interested in investing in businesses that can grow profits without the burden of debt, then check out this free list of growing businesses that have net cash on the balance sheet.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.