The Kailas Rubber Company Limited Annual Reports, Balance Sheet and Financials

The Kailas Rubber Company Limited Consolidated Balance Sheet (Rs in Crores)

The Kailas Rubber Company Limited Consolidated Profit & Loss Statement (Rs in Crores)

The Kailas Rubber Company Limited Consolidated Cash Flow Statement (Rs in Crores) 

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

Cash Flow from Operating Activities

The company showed a strong improvement in operating performance in FY 2025. Net profit before tax increased significantly to ₹2.65 crore from ₹0.25 crore, indicating better core profitability. Adjustments such as depreciation remained stable, while working capital changes contributed positively—especially a rise in trade payables and recovery in receivables, which improved liquidity.

As a result, cash generated from operations rose sharply to ₹3.76 crore compared to ₹0.35 crore last year. However, after accounting for interest paid/received, dividends, and taxes, the net operating cash flow stood at ₹1.98 crore, a turnaround from negative ₹2.06 crore in FY 2024. This indicates improved cash-generating ability from core business operations, though still impacted by financial and tax outflows.

Cash Flow from Investing Activities

Investing activities showed a net cash outflow of ₹2.95 crore in FY 2025, compared to a strong inflow of ₹4.00 crore in FY 2024. The previous year benefited significantly from proceeds of ₹5.00 crore from the sale of tangible assets, which did not recur this year (only ₹0.07 crore in FY 2025).

Additionally, there were substantial other cash outflows (₹4.67 crore), which heavily weighed on investing cash flow. Although interest and dividend income provided some inflows, they were insufficient to offset the overall outflows. This suggests increased investment or deployment of funds during the year.

Cash Flow from Financing Activities

Financing activities remained stable and minimal, with a consistent outflow of ₹0.23 crore in both years due to dividend payments. There were no major borrowings or repayments, indicating that the company is not actively relying on external financing and is maintaining a steady dividend policy.

Net Cash Flow Position

Overall, the company reported a net decrease in cash and cash equivalents of ₹1.20 crore in FY 2025, compared to an increase of ₹1.70 crore in FY 2024. Despite improved operating cash flows, the heavy outflows in investing activities led to an overall decline in cash position.

The closing cash balance reduced to ₹1.26 crore from ₹2.47 crore, reflecting pressure on liquidity. While operational performance has strengthened, sustained investing outflows could impact cash reserves if not supported by consistent operating inflows.

Financial ratios of The Kailas Rubber Company Limited

Summary of financial ratios for the years 2025 and 2024:

Current Ratio

The current ratio declined from 7.28 in FY 2024 to 4.60 in FY 2025. Although it still indicates a strong liquidity position, the reduction suggests comparatively lower short-term financial cushioning. The company continues to comfortably meet its short-term obligations, but excess liquidity has reduced, possibly due to better utilization of current assets.

Return on Equity (ROE)

ROE dropped sharply from 14% to 0.07%, indicating a significant decline in returns generated for shareholders. Despite profitability at the operating level, the company was unable to translate it into adequate returns on equity, reflecting inefficiency in capital utilization or lower net earnings attributable to shareholders.

Inventory Turnover Ratio

The inventory turnover ratio decreased from 65.19 to 31.22, showing slower movement of inventory in FY 2025. This suggests that inventory is being held for a longer period, which may indicate weaker demand, overstocking, or inefficiencies in inventory management.

Trade Receivables Turnover Ratio

The receivables turnover ratio improved from 8.35 to 10.97, indicating better collection efficiency. The company is recovering its dues faster, which positively impacts cash flow and reduces the risk of bad debts.

Trade Payables Turnover Ratio

The payables turnover ratio increased significantly from 0.88 to 4.47, suggesting that the company is paying its suppliers more quickly than before. While this may improve supplier relationships, it could also reduce liquidity if payments are made too quickly without optimal cash management.

Net Capital Turnover Ratio

This ratio declined from 0.32 to 0.26, indicating reduced efficiency in utilizing working capital to generate revenue. The company is generating lower sales per unit of working capital, reflecting inefficiencies in asset utilization.

Net Profit Ratio

The net profit ratio fell sharply from 91% to 38%. Although still relatively high, this decline indicates a reduction in overall profitability margins, possibly due to increased costs or lower revenue growth.

Return on Capital Employed

ROCE decreased from 15% to 9%, showing reduced efficiency in generating profits from total capital employed. This suggests that overall capital utilization has weakened in FY 2025.

Return on Investments

Return on investments dropped from 20% to 10%, indicating lower earnings from investment activities. This aligns with the decline seen in investment income in the cash flow statement and reflects reduced returns from deployed funds.