This study examines how effective working capital management ensures financial stability and operational efficiency within the capital-intensive power sector. By analyzing inventory, cash strategies, and receivables, the research identifies how balancing current assets and liabilities mitigates insolvency risks and project delays. A primary focus is placed on the challenges created by delayed payments from distribution companies (DISCOMs) and their strain on liquidity. Through an evaluation of financial ratios and cash conversion cycles, the paper highlights methods to optimize the operating cycle despite fluctuating fuel costs. Ultimately, it proposes strategic frameworks to maintain continuous production, meet short-term obligations, and maximize long-term shareholder value.