Indian Potash Annual Reports, Balance Sheet and Financials

Indian Potash Limited Balance Sheet (Rs in Crores)

Indian Potash Limited Profit & Loss Statement (Rs in Crores)

 Indian Potash Limited Consolidated Cash Flow Statement (Rs in Crores)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities

The company reported a profit before tax of ₹2,213.18 crores in 2024, down from ₹2,707.64 crores in 2023. Adjustments to the profit included depreciation and amortisation (₹60.71 crores), finance costs (₹383.76 crores), and impairments such as goodwill impairment (₹4.10 crores). Notable deductions include the share of net profits from equity method investments (₹-1,959.42 crores) and interest income (₹-58.58 crores).

After these adjustments, the operating profit before working capital changes was ₹624.79 crores, compared to ₹1,039.06 crores in 2023.

Changes in working capital had a significant impact:

A decrease in trade receivables of ₹1,734.47 crores added to cash flow, indicating better collections.

A decrease in trade payables of ₹-3,257.30 crores and other financial liabilities (₹-43.75 crores) resulted in cash outflows, reflecting payments to suppliers and settling of liabilities.

The decrease in inventories contributed ₹221.05 crores to cash inflow, showing better inventory management.

The company experienced a net cash outflow from operations of ₹-1,474.56 crores in 2024, compared to ₹-5,114.66 crores in 2023, reflecting improvements in working capital but still showing a significant cash outflow due to payments to suppliers and taxes.

Cash Flow from Investing Activities

Investing activities resulted in a net cash inflow of ₹681.18 crores in 2024, a sharp decline from ₹3,710.01 crores in 2023. Key transactions include:

Proceeds from the sale of current investments totaling ₹32,519.42 crores, offset by purchases of current investments amounting to ₹32,373.25 crores.

Dividend received from associate companies (₹785.87 crores) provided a significant cash inflow.

Interest received contributed ₹62.16 crores.

The company also made investments in property, plant, and equipment (₹-256.19 crores), which slightly reduced the net inflow from investing activities.

Cash Flow from Financing Activities

Financing activities produced a net cash inflow of ₹192.28 crores in 2024, compared to a net outflow of ₹-2,310.20 crores in 2023. Key highlights include:

Proceeds from short-term borrowings (₹601.06 crores) provided significant cash inflows.

The company also repaid some short-term borrowings and lease payments, while finance costs amounted to ₹-383.76 crores.

Dividend payments amounted to ₹-20.02 crores.

Despite interest and dividend payments, the inflow from borrowings helped the company generate positive cash flow from financing activities.

Net Decrease in Cash and Cash Equivalents

Overall, the company experienced a net decrease in cash and cash equivalents of ₹-601.10 crores in 2024, compared to a larger outflow of ₹-3,714.85 crores in 2023. This was primarily driven by the significant outflows from operating activities, despite positive cash flows from investing and financing activities.

Financial Ratios of Indian Potash Limited 

 Here is a summary of the financial and operational metrics for Indian Potash Limited   for the year 2024 and 2023:

Current Ratio (in times)

The current ratio measures the company’s ability to cover short-term liabilities with its current assets. The ratio improved slightly from 1.31 in 2023 to 1.49 in 2024. This indicates that the company's liquidity has improved, meaning it is better positioned to meet its short-term obligations. However, a ratio close to 1 suggests that the company should maintain caution in managing its working capital.

Return on Equity Ratio (in %)

Return on equity (ROE) reflects the company’s profitability relative to shareholders' equity. The ratio declined from 14.91% in 2023 to 13.40% in 2024, indicating a slight drop in the company’s ability to generate returns for shareholders. While still a healthy figure, the decrease suggests that profits did not grow as rapidly as equity during the year.

Debt-Equity Ratio (%)

The debt-equity ratio compares the company's total debt to its equity. The ratio increased slightly from 73.19% in 2023 to 74.22% in 2024. This shows the company is relying more on debt to finance its operations, but the change is marginal. The ratio indicates that the company has significant leverage, meaning it could face higher financial risk if interest rates increase or cash flows become constrained.

Debt Service Coverage Ratio (times)

This ratio measures the company's ability to cover debt obligations with its operating income. A negative ratio of -94.06 in 2024, compared to -12.48 in 2023, indicates that the company’s earnings are insufficient to cover its debt servicing costs. This significant deterioration suggests that the company may struggle with its debt obligations, reflecting higher financial risk.

Inventory Turnover Ratio (times)

The inventory turnover ratio reflects how efficiently the company manages its inventory. The ratio decreased from 5.91 in 2023 to 4.62 in 2024, indicating slower inventory turnover. This suggests that inventory is moving more slowly, which could result in higher carrying costs or reduced sales efficiency.

Trade Receivables Turnover Ratio (in times)

This ratio measures how efficiently the company collects payments from its customers. The ratio fell sharply from 9.06 in 2023 to 4.59 in 2024, indicating that the company is taking longer to collect receivables. This slowdown could lead to cash flow challenges, as delayed customer payments might hinder liquidity.

Trade Payables Turnover Ratio (in times)

The trade payables turnover ratio shows how quickly the company pays its suppliers. The ratio increased from 3.97 in 2023 to 4.80 in 2024, suggesting that the company is settling its payables faster. While this could indicate stronger cash flow, it may also mean that the company is under pressure to meet supplier obligations more promptly.

Net Capital Turnover Ratio (in times)

The net capital turnover ratio measures how efficiently the company uses its working capital to generate revenue. The ratio decreased significantly from 11.16 in 2023 to 6.25 in 2024. This indicates that the company’s ability to generate revenue from its working capital has declined, possibly due to slower sales or higher working capital requirements.

Net Profit Ratio (%)

The net profit ratio reflects the percentage of revenue that translates into profit. The ratio improved from 2.26% in 2023 to 3.71% in 2024, indicating better profitability. This suggests that the company has become more efficient in controlling costs or generating higher margins, resulting in a greater proportion of profits from its revenue.

Return on Capital Employed (ROCE) Ratio (%)

ROCE measures how efficiently the company uses its capital to generate profits. The ratio decreased from 18.61% in 2023 to 13.39% in 2024, indicating a decline in the company’s ability to generate returns on its capital. This could be due to lower profitability or increased capital investment that did not immediately yield high returns.

Return on Investments (ROI) (%)

ROI indicates the profitability of the company’s investments. The ratio increased dramatically from 24.26% in 2023 to 76.50% in 2024, showing a significant improvement in the returns the company generated from its investments. This sharp increase suggests that the company made successful investment decisions that resulted in higher returns.