Indian Potash Annual Reports, Balance Sheet and Financials

Indian Potash Limited Consolidated Balance Sheet (Rs in Crores)

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

Cash Flow from Operating Activities

During FY 2024–25, the company generated a net cash inflow of ₹5.04 crores from operating activities, compared to a net cash outflow of ₹14.69 crores in FY 2023–24, indicating a substantial turnaround in operational cash performance. Profit before tax increased to ₹26.87 crores from ₹22.13 crores in the previous year. However, operating profits were significantly adjusted for non-cash and non-operating items, most notably the share of net profits from equity-accounted investments amounting to ₹19.49 crores, which was deducted as it did not result in cash inflow. After these adjustments, operating profit before working capital changes stood at ₹11.23 crores. Working capital movements remained mixed, with increases in trade receivables, inventories, and other non-current assets exerting pressure, while a sharp rise in trade payables of ₹17.09 crores provided support. Consequently, cash generated from operations amounted to ₹7.88 crores, and after payment of direct taxes of ₹2.84 crores, net operating cash flow turned positive, reflecting improved working capital management compared to the previous year.

Cash Flow from Investing Activities

The company reported a net cash outflow of ₹8.81 crores from investing activities in FY 2024–25, as against a net cash inflow of ₹6.76 crores in FY 2023–24. Major outflows were incurred towards purchase of fixed assets amounting to ₹6.56 crores, acquisition of a business unit of ₹0.20 crores, increased non-current investments of ₹5.36 crores, and net investments in mutual funds of ₹6.96 crores. These were partly offset by significant dividend income from investments of ₹10.40 crores and interest income of ₹0.36 crores. The negative investing cash flow indicates higher deployment of funds into capital expenditure and investment activities, suggesting a focus on long-term growth, though it impacted short-term liquidity.

Cash Flow from Financing Activities

Financing activities resulted in a net cash inflow of ₹1.31 crores during FY 2024–25, compared to ₹1.92 crores in FY 2023–24. The company raised funds primarily through short-term borrowings amounting to ₹7.41 crores, while long-term borrowings remained limited at ₹0.24 crores. These inflows were partly offset by repayment of borrowings, finance cost paid of ₹4.99 crores, lease principal repayments, and equity dividend payment of ₹0.21 crores. The modest net inflow suggests controlled reliance on external financing to meet funding requirements.

Net Change in Cash and Cash Equivalents

Overall, the company experienced a net decrease in cash and cash equivalents of ₹2.46 crores during FY 2024–25, compared to a decline of ₹6.01 crores in FY 2023–24. Cash and cash equivalents reduced from ₹6.10 crores at the beginning of the year to ₹3.67 crores at the end of the year. A marginal positive impact of ₹0.03 crores was recorded due to exchange rate fluctuations. The decline in closing cash balance is mainly attributable to higher investing cash outflows, although the improvement in operating cash flows helped limit the overall reduction.

Indian Potash Limited Financial ratios 

Summary of the Financial ratios for the years 2025 and 2024:

Current Ratio

The current ratio declined from 1.49 in FY 2023–24 to 1.20 in FY 2024–25, indicating a reduction in short-term liquidity. Although the ratio remains above 1, the downward trend suggests increased pressure on working capital, possibly due to higher current liabilities or tighter cash management. The company’s ability to meet short-term obligations has weakened compared to the previous year.

Return on Equity

Return on equity improved significantly from 13.40% to 19.44%, reflecting enhanced profitability and more efficient utilization of shareholders’ funds. The increase indicates that the company generated higher returns for equity shareholders, driven by improved net profits and better capital efficiency.

Debt–Equity Ratio

The debt–equity ratio reduced from 74.22% to 70.30%, showing a marginal decline in financial leverage. This indicates a slightly improved capital structure with lower dependence on borrowed funds relative to equity. The company appears to be gradually strengthening its solvency position.

Debt Service Coverage Ratio

The debt service coverage ratio improved sharply from (-94.06) in FY 2023–24 to 14.82 in FY 2024–25. This substantial improvement reflects a strong recovery in operating cash flows and earnings, enabling the company to comfortably meet its debt servicing obligations. The current DSCR indicates excellent debt repayment capacity.

Inventory Turnover Ratio

The inventory turnover ratio declined from 4.62 times to 4.11 times, suggesting slower movement of inventory during the year. This may indicate higher inventory holding levels or reduced sales efficiency, leading to increased inventory carrying costs.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio improved from 4.59 times to 5.06 times, reflecting better collection efficiency. The company has been more effective in converting credit sales into cash, which positively impacts liquidity and working capital management.

Trade Payables Turnover Ratio

The trade payables turnover ratio increased significantly from 4.85 times to 12.63 times, indicating faster payment to suppliers. While this reflects improved credibility and timely settlement of dues, it may also reduce the benefit of supplier credit and put pressure on short-term liquidity.

Net Capital Turnover Ratio

The net capital turnover ratio improved from 6.20 times to 11.22 times, demonstrating a substantial enhancement in the efficiency of net working capital utilization. The company generated higher revenue per unit of working capital employed, reflecting effective operational and financial management.

Net Profit Ratio

The net profit ratio increased from 3.71% to 6.43%, indicating improved cost control, pricing efficiency, or operational performance. The rise in profit margin shows that a larger portion of revenue was converted into net profit during the year.

Return on Capital Employed

ROCE improved from 13.39% to 17.94%, reflecting better utilization of total capital employed in the business. This indicates enhanced operational efficiency and profitability from long-term funds invested in the company.

Return on Investments

Return on investments declined from 76.50% to 61.17%, suggesting lower income or gains from investments during the year. Although the return remains strong, the decline may be due to reduced dividend income or lower valuation gains compared to the previous year.