Hindusthan Engineering Annual Reports, Balance Sheet and Financials

Hindusthan Engineering & Industries Limited Consolidated Balance Sheet (Rs in Lakhs)

Hindusthan Engineering & Industries Limited Consolidated Profit & Loss Statement (Rs in Lakhs)

Hindusthan Engineering & Industries Limited Consolidated Cash Flow Statement (Rs in Lakhs) 

Summary of the Cash Flow Statement for the years 2025 and 2024:

Cash Flow from Operating Activities
The company’s operating activities generated a net cash inflow of ₹18,450 lakh in 2025, compared to an outflow of ₹4,600 lakh in 2024. This significant turnaround reflects improved operational efficiency. Net profit before tax rose to ₹30,028 lakh, supported by higher depreciation and provisioning for doubtful debts. Working capital changes also played a role: while receivables decreased by ₹2,352 lakh and inventories increased only marginally (₹267 lakh), payables reduced by ₹6,714 lakh, limiting some of the benefits. Still, the business generated a much stronger operating surplus compared to the prior year, where large inventory buildup and higher receivables drained cash.

Cash Flow from Investing Activities
Investing activities contributed a net inflow of ₹588 lakh in 2025, versus a heavy outflow of ₹9,408 lakh in 2024. The improvement was driven by higher inflows from financial assets (₹2,896 lakh inflow) and steady interest income (₹4,263 lakh). On the outflow side, the company continued capital expenditure, with ₹6,275 lakh spent on fixed assets, higher than the prior year’s ₹4,025 lakh. The shift from net negative to net positive cash flow suggests more disciplined investment and better returns from financial assets.

Cash Flow from Financing Activities
From financing activities, the company recorded a net inflow of ₹3,232 lakh in 2025, compared to ₹9,708 lakh in 2024. The main driver was an increase in borrowings (₹7,564 lakh), though this was lower than the previous year’s ₹12,651 lakh. Interest expense also rose substantially to ₹4,332 lakh (from ₹2,943 lakh), which partly offset the financing inflows. This indicates the company still relies on borrowings but at a reduced pace compared to the previous year, with a higher cost of servicing debt.

Net Cash Position
Overall, the company’s cash and cash equivalents increased sharply by ₹22,270 lakh in 2025, reversing the ₹4,300 lakh decline in 2024. The closing balance of cash stood at ₹24,280 lakh, up from ₹2,010 lakh a year earlier. The major contributor was strong operating cash flow, supported by moderate inflows from investing and financing activities.

Financial Ratios of Hindusthan Engineering & Industries Limited

Summary of the financial ratios for Hindusthan Engineering & Industries Limited for the year 2025 and 2024:

Current Ratio
The current ratio measures a company’s ability to meet its short-term obligations using its current assets. A ratio above 1 indicates sufficient liquidity. In this case, the ratio improved from 2.17 in 2024 to 2.52 in 2025, showing stronger liquidity. This suggests that the company has built a larger cushion of current assets relative to its liabilities, which reduces short-term financial risk. However, excessively high ratios may indicate inefficient use of resources.

Debt-Equity Ratio
This ratio compares the company’s total debt to shareholders’ equity, reflecting financial leverage. A lower value indicates less reliance on external debt. The ratio rose slightly from 0.29 to 0.30, suggesting only a marginal increase in leverage. The company is still conservatively financed, relying more on equity than debt, which keeps financial risk at a manageable level.

Debt Service Coverage Ratio (DSCR)
DSCR shows the ability to service debt obligations (interest and principal) from operating earnings. A higher value indicates greater repayment capacity. The ratio declined from 8.86 in 2024 to 6.76 in 2025, though it still remains strong. This means the company is well-positioned to cover its debt commitments, but the drop hints at slightly higher debt servicing pressure compared to the previous year.

Return on Equity (ROE)
ROE measures the profitability generated for shareholders relative to their equity investment. The ratio declined from 0.16 (16%) in 2024 to 0.14 (14%) in 2025, showing a dip in returns. While the business is still generating healthy returns, this drop suggests either reduced profitability or increased equity base that diluted returns.

Inventory Turnover Ratio
This ratio indicates how efficiently inventory is converted into sales. A higher turnover suggests effective inventory management. The ratio fell from 5.13 to 4.20, pointing to slower inventory movement. This could imply excess stock, reduced sales efficiency, or potential working capital blockage, which needs monitoring.

Trade Receivables Turnover Ratio
This measures how efficiently the company collects receivables from customers. The ratio decreased from 11.61 to 10.86, suggesting a slight delay in collections. While still at a good level, the fall indicates that more funds are tied up in receivables, which could affect liquidity if not managed well.

Trade Payables Turnover Ratio
This ratio reflects how quickly the company pays its suppliers. It dropped from 9.97 to 7.68, indicating slower payments to creditors. While this may improve short-term liquidity, consistently delaying payments could strain supplier relationships.

Net Capital Turnover Ratio
This ratio shows how efficiently working capital is used to generate sales. It declined from 3.09 to 2.57, suggesting lower efficiency in utilizing working capital. This aligns with the observed slowdown in inventory and receivables turnover, hinting at increased working capital blockage.

Net Profit Ratio
The net profit ratio measures profitability as a percentage of sales. It remained stable, moving slightly from 7.52% in 2024 to 7.42% in 2025. The small decline indicates that while sales and operations were stable, costs may have increased slightly, putting mild pressure on margins.

Return on Capital Employed (ROCE)
ROCE evaluates how effectively the company uses total capital employed to generate profits. The ratio slipped from 16.76% to 16.30%, indicating a marginal decline in overall efficiency of capital utilization. Despite the fall, the level remains healthy, showing the business continues to generate strong returns from its investments.