Did some further research on Changes in Inventory and got a different understanding. Pls correct if this seems wrong.
Since these are Quarter results we are talking about Inventory Change and not the actual Inventory. Here a negative number will increase the cost of goods sold and hence reduces income for period reporting period.
Inventory change is the difference of value between last reported financials and current financials (quarterly or yearly). If the current period inventory is lower than last period inventory we have a negative change and number accordingly.
One of the way calculating Cost of goods sold is adjust the cost of goods purchased or manufactured with changes in inventory. If the change in inventory is positive it means there is unsold item lying and reduced from cost of goods sold. For negative change in inventory it will be reverse that means sold more than previous period and hence added to cost of goods sold.
If Actual Inventory is 100 and change in inventory is say positive 10 then cost of goods sold is 90.
If Actual Inventory is 100 and change in inventory is say negative 10 then cost of goods sold is 110.
So as per AR 2019 - If I am not wrong then Total Inventory on CA was 322 Cr and with this change the net Inventory (of -112 cr) after Q1 2019 will be 322 - 112 = 210 Cr .
Typically the Closing Inventory has always been 300+ Cr over the last 5 years.
I can interpret two things : Management has either turned efficient and improved in Inventory Management or the Company has delivered the best Margins already for this year in Q1 and the Margins may go down in the coming quarters in order to build up the needed Inventory for future sales
I am tending towards the later conclusion more than earlier one. Also other thing to note here is Ebidta Margins over last quarter : 34.5%, 27.1%, 28.5%, 26.1%, 25.1%
This also points to one time exceptional performance of Margins than a sustained one.
But if they can pick up sales then ofcourse the impact could be smoothened due a larger base.