Hindustan Auto Finance Limited Annual Reports, Balance Sheet and Financials

Hindustan Auto Finance Limited Balance Sheet (Rs in Lakhs)

Hindustan Auto Finance Limited Profit & Loss Statement (Rs in Lakhs)

 Hindustan Auto Finance Limited Cash Flow Statement (Rs in Lakhs)

Cash Flow Analysis of Hindustan Auto Finance Limited

1. Cash Flow from Operating Activities
The Company reported a profit before tax of 3.29 in FY 2024-25 compared to 0.82 in the previous year, indicating improvement in core profitability. After adjusting for depreciation and other items, operating profit before working capital changes stood at 4.64. Significant working capital movements were observed, including an increase in other non-current financial assets and a decrease in trade receivables, which positively impacted liquidity. Overall, cash generated from operations amounted to 46.04, and after tax payments, net cash inflow from operating activities stood strong at 45.91 as against an outflow of 8.10 in the previous year, reflecting better operational efficiency and cash generation.

2. Cash Flow from Investing Activities
During the year, the Company incurred capital expenditure of 16.70 towards purchase of property, plant and equipment. This resulted in a net cash outflow from investing activities of 16.70, indicating investment in long-term assets for operational strengthening and future growth. There were no such investing activities in the previous year.

3. Cash Flow from Financing Activities
No financing cash flows were reported during the year as well as in the previous year, indicating that the Company neither raised nor repaid borrowings or equity during the period and relied primarily on internal accruals for its funding requirements.

4. Net Movement in Cash & Cash Equivalents
The Company recorded a net increase in cash and cash equivalents of 29.21 during FY 2024-25, compared to a decrease of 8.10 in FY 2023-24. Consequently, closing cash and cash equivalents rose significantly to 35.26 from 6.05 in the previous year, reflecting a strengthened liquidity position supported mainly by robust operational cash inflows.

 Financial Ratios of Hindustan Auto Finance Limited

Ratio-wise Interpretation – Hindustan Auto Finance Limited

1. Current Ratio
The current ratio increased sharply to 136.57 in 2025 from 5.47 in 2024, indicating a very high level of current assets compared to current liabilities. While this reflects strong short-term liquidity and ability to meet obligations, such an exceptionally high ratio may also suggest inefficient utilization of working capital or idle funds.

2. Debt–Equity Ratio
The debt–equity ratio was not reported in 2025 compared to 12.88% in 2024, indicating either negligible debt levels or restructuring of capital. The earlier low ratio reflected limited reliance on external borrowings and a relatively conservative capital structure.

3. Debt Service Coverage Ratio (DSCR)
DSCR was not available for 2025, whereas it stood at 2.60% in 2024, suggesting adequate capacity to service debt obligations in the previous year. Absence of the ratio may indicate minimal debt servicing requirements during the current year.

4. Return on Equity (ROE)
ROE improved to 1.29% in 2025 from 0.34% in 2024, reflecting better profitability for shareholders, though overall returns remain modest and indicate limited earnings generation relative to equity.

5. Trade Receivables Turnover Ratio
The ratio was not reported in 2025, compared to 7.72 times in 2024, which previously indicated efficient recovery of receivables. Non-availability may imply reduced credit sales or changes in reporting structure.

6. Net Working Capital Turnover Ratio
The ratio declined significantly to 0.06% in 2025 from 8.22% in 2024, indicating lower efficiency in utilizing working capital to generate revenue and possibly excess funds tied up in current assets.

7. Net Profit Ratio
The net profit ratio surged to 3082.01% in 2025 from 6.00% in 2024, reflecting an extraordinary increase in profitability. This may be due to exceptional income, reduced expenses, or a low revenue base inflating the margin, and should be interpreted cautiously.

8. Return on Capital Employed (ROCE)
ROCE improved to 1.28% in 2025 from 0.33% in 2024, indicating slightly better utilization of total capital, though returns remain relatively low and suggest scope for improved operational efficiency.

Overall Analysis:
Hindustan Auto Finance Limited shows strong liquidity and improved profitability indicators in 2025, but the extremely high current ratio and profit margin suggest possible inefficiencies or exceptional financial effects rather than purely operational growth. Returns on equity and capital remain modest, indicating the need for better deployment of funds to enhance long-term financial performance.