Arcotech Ltd Annual Reports, Balance Sheet and Financials

Arcotech Limited Standalone Balance Sheet (Rs in Lakhs)

Arcotech Limited Standalone Profit & Loss Statement (Rs in Lakhs)

Arcotech Limited Standalone Cash Flow Statement (Rs in Lakhs) 

Summary of cash flow statement:

Cash Flow from Operating Activities:
The company continues to report negative operating cash flows, with an outflow of ₹866.02 lakhs in 2025 compared to ₹235.30 lakhs in 2024. Although the loss before tax narrowed (from -₹16,870.77 lakhs to -₹9,900.54 lakhs), the operating cash situation worsened. This is mainly because non-cash adjustments declined significantly, especially provisions for doubtful debts and advances, reducing the cushioning effect on cash flow. Additionally, adverse working capital movements—particularly reductions in financial liabilities and trade payables—further strained liquidity. Overall, the company is not generating cash from its core operations, indicating weak operational sustainability.

Cash Flow from Investing Activities:
Investing activities show minimal outflows, with only ₹1.62 lakhs spent in 2025 compared to ₹5.32 lakhs in 2024 on property, plant, and equipment. This indicates very limited capital expenditure, suggesting that the company is either conserving cash due to financial stress or not investing in growth and capacity expansion, which could impact long-term competitiveness.

Cash Flow from Financing Activities:
Financing activities provided a positive inflow of ₹867.10 lakhs in 2025 (up from ₹240.62 lakhs in 2024), mainly due to increased borrowings. This inflow almost entirely offsets the negative operating cash flow, indicating that the company is relying heavily on external financing to sustain its operations. Such dependence on borrowings is not sustainable in the long term, especially given weak profitability and negative coverage ratios.

Net Change in Cash and Cash Equivalents:
The net cash position slightly declined by ₹0.54 lakhs in 2025, compared to no change in 2024. This marginal decline reflects a fragile cash balance situation, where financing inflows are just enough to cover operational deficits.

Financial ratios of Arcotech Limited

Summary of ratios for the year 2025 and 2024:

Current Ratio:
The current ratio declined sharply from 0.17 in 2024 to 0.06 in 2025, indicating a severe deterioration in short-term liquidity. This suggests the company has very limited current assets relative to its current liabilities and may face significant difficulty in meeting its short-term obligations.

Debt-Equity Ratio:
The debt-equity ratio improved from -2.50 to -1.83, but it remains negative in both years. A negative ratio typically indicates negative shareholders’ equity, reflecting accumulated losses or erosion of net worth. Although the improvement is marginal, the capital structure is still highly stressed and financially unstable.

Debt Service Coverage Ratio:
The DSCR improved slightly from -0.27 to -0.13, but it remains negative, which means the company is not generating enough operating income to cover its debt servicing obligations. This signals continued financial distress, despite a minor improvement.

Return on Equity:
ROE decreased significantly from 0.71 in 2024 to 0.30 in 2025. This indicates that the company’s ability to generate returns for its shareholders has weakened considerably, reflecting lower profitability or inefficiencies in utilizing equity capital.

Return on Capital Employed:
ROCE dropped from 0.60 to 0.23, showing a substantial decline in the efficiency with which the company is using its overall capital. This suggests reduced operational performance and weaker returns from invested capital.

Return on Investment:
ROI was not reported in 2025, compared to 0.05 in 2024. The absence of this metric may indicate negligible or negative returns, or insufficient relevant data, further pointing toward weak investment performance.