Eaton Fluid Power Annual Reports, Balance Sheet and Financials

Danfoss Systems Limited Balance Sheet (Rs in millions)

Danfoss Systems Limited Profit & Loss Statement (Rs in millions)

Danfoss Systems Limited Consolidated Cash Flow Statement (Rs in millions) 

Cash Flow from Operating Activities:

There 's a significant increase in cash generated from operations from 346.39 million in 2022 to 566.14 million in 2023. This increase is primarily driven by higher operating profit before working capital changes, which increased from 491.57 million in 2022 to 350.44 million in 2023.

Cash Flow from Investing Activities:

The net cash flow used in investing activities improved slightly from -180.01 million in 2022 to -150.85 million in 2023. This improvement is mainly due to a decrease in the proceeds from the sale of property, plant, and equipment and an increase in interest received.

Cash Flow from Financing Activities:

The net cash flow used in financing activities increased significantly from -142.98 million in 2022 to -367.69 million in 2023. This increase is primarily due to a higher repayment of short-term borrowings to a related party, repayment of long-term borrowings to a related party, and repayment of long-term borrowings to other than related party.

Net Decrease in Cash and Cash Equivalents:

There 's a decrease in the net decrease in cash and cash equivalents from -43.11 million in 2022 to -40.32 million in 2023.

Cash and Cash Equivalents at the End of the Year:

Cash and cash equivalents at the end of the year decreased significantly from 43.82 million in 2022 to 3.50 million in 2023.

Components of Cash and Cash Equivalents:

The balance with banks in current accounts decreased from 43.82 million in 2022 to 0 in 2023, while the balance in deposit accounts increased from 3.50 million in 2022 to 0 in 2023.

Financial Ratios of Danfoss Systems Limited

Current Ratio:

There is a decrease in the current ratio from 1.54 in 2022 to 1.29 in 2023, indicating a decline in the company 's short-term liquidity. It may face challenges in meeting its short-term obligations.

Debt-Equity Ratio:

The debt-equity ratio has decreased significantly from 1.29 in 2022 to 0.79 in 2023. This implies a reduction in financial leverage and indicates that the company relies less on debt financing compared to equity.

Debt Service Coverage Ratio:

There 's a significant improvement in the debt service coverage ratio from 0.28 in 2022 to 0.64 in 2023. This indicates the company 's ability to cover its debt obligations with its operating income.

Return on Equity Ratio:

There 's a considerable decrease in the return on equity ratio from 0.44 in 2022 to 0.14 in 2023. This suggests lower profitability in 2023 compared to the previous year relative to shareholders ' equity.

Inventory Turnover Ratio:

The inventory turnover ratio has slightly decreased from 4.01 in 2022 to 4 in 2023, indicating a slightly slower rate of inventory turnover.

Trade Receivable Turnover Ratio:

There 's an improvement in the trade receivable turnover ratio from 4.31 in 2022 to 4.61 in 2023, indicating a more efficient collection of receivables.

Trade Payable Turnover Ratio:

The trade payable turnover ratio has decreased slightly from 3.68 in 2022 to 3.55 in 2023, indicating a slightly slower rate of payment to suppliers.

Net Capital Turnover Ratio:

There 's a significant increase in the net capital turnover ratio from 6.11 in 2022 to 10.98 in 2023, suggesting that the company is generating more sales revenue per unit of capital employed.

Net Profit Ratio:

The net profit ratio has decreased substantially from 0.06 in 2022 to 0.02 in 2023, indicating a lower profit margin for the company in 2023.

Return on Capital Employed Ratio:

There 's a decrease in the return on capital employed ratio from 0.23 in 2022 to 0.16 in 2023, indicating a lower profitability relative to the capital invested in the business.

Dividend history

During the year ended March 31, 2023, the board of directors have not recommended dividend to equity shareholder (March 31, 2022: INR Nil per share). Therefore, No dividend has been declared or paid during the year by the Company.

Industry Overview

The power and electricity sector is a vital component of modern economies, encompassing the generation, transmission, distribution, and consumption of electricity. Electricity is primarily generated through various methods, including fossil fuels, nuclear power, and renewable sources like solar and wind energy. The sector requires extensive infrastructure, including power plants, transmission lines, and distribution networks, which are subject to regulation to ensure safety, environmental protection, and fair pricing. Increasing emphasis on renewable energy, smart grids, and energy storage is driving significant changes in the industry, along with the proliferation of electric vehicles and the rise of decentralization through microgrids. These transformations offer both challenges and opportunities as stakeholders strive to meet growing energy demand while transitioning to a more sustainable and resilient energy system. Also, gross electricity generation in India has increased from 747.07 BU in 2008-09 to 1624.47 BU in 2022-23, at a CAGR of about 5.7%.