Hilltone Software & Gases Annual Reports, Balance Sheet and Financials

Hilltone Software & Gases Limited Standalone Balance Sheet (Rs in Crores)

Hilltone Software & Gases Limited Standalone Profit & Loss Statement (Rs in Crores)

Hilltone Software & Gases Limited Standalone Cash Flow Statement (Rs in Crores) 

Summary of cash flow statement for the year 2025 and 2024:

Cash Flow from Operating Activities

The company reported a positive operating cash flow of ₹0.75 crore in FY25, a significant improvement from the negative ₹7.18 crore in FY24, indicating better cash generation from core operations. Despite a decline in profit before tax to ₹0.23 crore from ₹0.62 crore, the cash flow improved due to non-cash adjustments such as depreciation and provisions (gratuity and doubtful debts). A key contributor to this turnaround was efficient working capital management, which shifted from a large outflow in the previous year to a positive contribution. However, higher interest income reduced operating cash flow as it is classified separately. Overall, the company demonstrates improved operational liquidity despite lower profitability.

Working capital changes played a crucial role in improving cash flow during FY25. The company benefited from better realization of trade receivables (₹0.35 crore inflow), indicating improved collection efficiency. Although inventory levels increased slightly, impacting cash negatively, the reduction in other current assets significantly boosted liquidity compared to the previous year’s heavy outflow. On the liabilities side, moderate increases in trade payables and other liabilities supported cash flow. Additionally, movements in non-current financial assets contributed positively, suggesting recovery or restructuring of longer-term balances. Overall, effective management of current assets and liabilities was the primary driver of cash flow improvement.

Cash Flow from Investing Activities

The company generated a net inflow of ₹0.57 crore from investing activities, compared to an outflow of ₹0.81 crore in FY24, reflecting a more balanced investment position. While the company continued to invest in fixed assets (₹1.82 crore outflow), it offset this through interest income (₹0.65 crore) and a substantial recovery of loans and advances (₹1.70 crore). Small proceeds from asset sales also contributed marginally. This indicates that although the company is still investing for growth, it is also recovering funds and generating returns from past investments, resulting in a net positive cash position from investing activities.

Cash Flow from Financing Activities

Financing activities resulted in a net cash outflow of ₹0.22 crore in FY25, compared to a large inflow of ₹8.10 crore in FY24. The previous year’s inflow was driven by the issuance of share capital, which did not recur in FY25. Instead, the company focused on repayment of loan liabilities and servicing interest obligations, leading to cash outflows. This indicates a shift from raising funds to repaying and stabilizing financial obligations, suggesting improved financial discipline and reduced reliance on external financing.

Net Increase in Cash & Cash Equivalents

Overall, the company recorded a net increase in cash of ₹1.11 crore, significantly higher than ₹0.10 crore in the previous year. This was primarily driven by strong operating cash flow and positive investing inflows, despite financing outflows. As a result, the closing cash balance rose to ₹1.58 crore from ₹0.47 crore, indicating a strengthened liquidity position. This improvement reflects the company’s better cash management and recovery from prior year stress, positioning it more comfortably to meet short-term obligations.

Financial ratios of Hilltone Software & Gases Limited

Summary of ratios for the year 2025 and 2024:

Current Ratio

The current ratio improved to 2.30 in FY25 from 2.08 in FY24, indicating that the company’s liquidity position has strengthened. It has sufficient current assets to cover its short-term liabilities, reflecting better working capital management and an improved ability to meet immediate obligations.

Total Debt Equity Ratio

The total debt-equity ratio increased to 1.28 from 1.15, showing a slight rise in leverage. This indicates that the company is using more debt relative to equity compared to the previous year, which may increase financial risk if not supported by strong earnings.

Debt Service Coverage Ratio

The debt service coverage ratio declined to 2.23 from 3.70, suggesting a reduced capacity to service debt from operating income. Although the ratio remains above 1, the sharp fall indicates weaker earnings and reduced financial cushion for debt repayment.

Return on Equity

Return on equity turned negative to -1.14% from 5.32%, indicating that the company incurred losses during FY25. This reflects a decline in shareholder returns and suggests inefficient utilization of shareholders’ funds during the year.

Inventory Turnover Ratio

The inventory turnover ratio decreased to 10.81 from 11.92, indicating slower movement of inventory. This suggests a slight decline in inventory management efficiency, with goods taking longer to be sold.

Debtors Turnover Ratio

Debtors turnover days increased to 5.74 days from 4.36 days, showing that the company is taking more time to collect receivables. This reflects a minor deterioration in collection efficiency, although the collection cycle is still relatively short.

Trade Payables Turnover Ratio

Trade payables days increased to 6.39 days from 5.90 days, indicating that the company is taking slightly longer to pay its suppliers. This may help conserve cash but could also indicate tighter liquidity management.

Net Capital Turnover Ratio

The net capital turnover ratio improved to 4.24 days from 5.69 days, showing better utilization of working capital. The company is generating revenue more efficiently from its working capital base.

Net Profit Ratio

The net profit ratio declined sharply to -2.09% from 7.40%, indicating that the company moved from profitability to losses. This reflects pressure on margins and overall operational performance.

Return on Capital Employed

Return on capital employed fell to -0.99% from 3.56%, indicating inefficient use of total capital employed. This decline aligns with the overall drop in profitability and suggests weaker operational performance during the year.