That is a one-off. An average over 5 years still shows earnings quality to be low. We can look at an average over 10 years as well and it would paint a similar picture. I think the fundamental reason for this is a different working capital structure. This is covered beautifully in the various deep dives on Bharat Rasayan:
Note that the numbers capture the picture looking backwards. I’ve clarified this in the main post as well. There is clear evidence for poor quality of earnings. This is not to say that earnings quality will be poor in the future. If BR can repeat its cash flow performance of FY20 in next 3-4 years, of course earnings quality will improve.
