KAMARHATTY Company Annual Reports, Balance Sheet and Financials

 Kamarhatty Company Limited Standalone Balance Sheet (Rs in Crores)

Kamarhatty Company Limited Standalone Profit & Loss Statement (Rs in Crores)

Kamarhatty Company Limited Standalone Cash Flow Statement (Rs in Crores)

Summary of the Cash Flow Statement for the years 2026 and 2025:

Cash Flow from Operating Activities

Cash flow from operating activities represents the cash generated from the company's principal business operations. During FY 2025–26, Kamarhatty Company Limited reported net cash generated from operating activities of ₹3.42 crore, compared with ₹17.05 crore in FY 2024–25, reflecting a significant decline of approximately 79.94%. Despite the substantial increase in net profit before tax from ₹5.47 crore to ₹31.36 crore, operating cash flow declined due to a considerable increase in working capital requirements. Operating profit before working capital changes increased from ₹27.16 crore to ₹51.72 crore, indicating improved operating profitability. However, inventory changes resulted in a cash outflow of ₹58.00 crore, while trade and other receivables absorbed ₹8.48 crore. These outflows were partly offset by a cash inflow of ₹17.75 crore from trade payables, other current liabilities and provisions, and ₹2.20 crore from changes in other financial liabilities. Consequently, cash generated from operations decreased from ₹18.12 crore to ₹5.20 crore. After payment of direct taxes amounting to ₹1.78 crore, net operating cash flow stood at ₹3.42 crore. Overall, the company recorded higher accounting profits but weaker operating cash generation, highlighting the need for improved inventory control and working capital management.

Cash Flow from Investing Activities

Cash flow from investing activities reflects expenditure on and proceeds from long-term assets and other investment-related transactions. During FY 2025–26, the company reported a net cash outflow of ₹7.08 crore, compared with ₹7.97 crore in FY 2024–25, representing a reduction of approximately 11.17% in the outflow. The company spent ₹6.85 crore on the purchase of property, plant and equipment, compared with ₹7.99 crore in the previous year, indicating continued capital investment at a relatively lower level. Changes in capital work in progress resulted in an outflow of ₹0.56 crore, almost unchanged from ₹0.57 crore in FY 2024–25. The company received ₹0.19 crore from the sale of property, plant and equipment and ₹0.12 crore as interest, compared with ₹0.52 crore and ₹0.07 crore, respectively, in the previous year. The continued investing outflow suggests that the company is maintaining or developing its productive asset base. However, because operating cash flow was insufficient to cover investing expenditure, the company had to rely on financing activities to meet its overall cash requirements.

Cash Flow from Financing Activities

Cash flow from financing activities represents cash inflows and outflows arising from borrowings and financing costs. During FY 2025–26, the company generated net cash of ₹6.63 crore from financing activities, compared with a net cash outflow of ₹9.33 crore in FY 2024–25, indicating a favourable change of ₹15.96 crore. The company received ₹6.45 crore from non-current borrowings and ₹9.10 crore from current borrowings, whereas the previous year recorded an outflow of ₹3.96 crore under non-current borrowings and an inflow of ₹7.18 crore from current borrowings. Interest paid decreased from ₹12.55 crore to ₹8.91 crore, providing some relief to the company's cash position. The positive financing cash flow helped support capital expenditure and compensate for the shortfall in operating cash generation. However, the inflow from borrowings indicates continued dependence on external financing. Although the reduction in interest payments is favourable, the company should ensure that additional borrowing remains manageable and that future operating cash flows are sufficient to service debt and meet repayment obligations.

Net Increase/(Decrease) in Cash and Cash Equivalents

The net increase in cash and cash equivalents was ₹2.97 crore in FY 2025–26, compared with a decrease of ₹0.24 crore in FY 2024–25. Cash and cash equivalents increased from an opening balance of ₹1.17 crore to a closing balance of ₹4.14 crore, whereas the previous year ended with a closing balance of ₹1.17 crore. The improvement indicates a stronger closing cash position and a positive overall movement in liquidity during the current year. However, the increase was supported primarily by financing inflows, as operating activities generated only ₹3.42 crore against investing expenditure of ₹7.08 crore. Therefore, the higher closing cash balance should be assessed alongside the company's borrowing requirements and working capital position. Overall, the company demonstrated a substantial improvement in profitability and a positive closing cash movement, but the sharp decline in operating cash flow and the significant inventory-related outflow remain key concerns. Strengthening internal cash generation and improving working capital efficiency will be important for maintaining sustainable liquidity in the future.

Financial ratios of Kamarhatty Company Limited 

Summary of Financial Ratios for the year 2026 and 2025:

Current Ratio

The current ratio of Kamarhatty Company Limited improved from 1.32 in FY 2024–25 to 1.49 in FY 2025–26, indicating an improvement in the company's short-term liquidity position. This suggests that the company has a stronger capacity to meet its current liabilities through its current assets. Although the ratio remains below the conventional benchmark of 2:1, the improvement is favourable and indicates better short-term financial stability. However, the company should continue to monitor its working capital requirements and ensure that sufficient liquid assets are available to meet its short-term obligations.

Debt-Equity Ratio

The debt-equity ratio declined significantly from 2.19 in FY 2024–25 to 1.17 in FY 2025–26, indicating a reduction in the company's financial leverage relative to shareholders' equity. This improvement suggests lower dependence on debt financing and a stronger capital structure. A lower ratio generally reduces financial risk and interest-related pressure. However, the ratio of 1.17 indicates that debt remains substantial relative to equity, and the company should continue to manage its borrowings prudently.

Debt Service Coverage Ratio

The debt service coverage ratio increased substantially from 0.18 in FY 2024–25 to 1.15 in FY 2025–26, reflecting a significant improvement in the company's capacity to meet its debt-servicing obligations. The ratio indicates that the company's available earnings or cash flow for debt servicing have improved considerably. However, a ratio of 1.15 provides only a relatively limited cushion above the level required to cover debt-servicing obligations. The company should focus on strengthening operating cash flow and maintaining adequate funds to meet interest and principal repayments.

Return on Equity Ratio

The return on equity ratio increased from 6.09% in FY 2024–25 to 29.72% in FY 2025–26, indicating a substantial improvement in the returns generated on shareholders' funds. This increase suggests stronger profitability and more effective utilisation of equity capital. The improvement is consistent with the significant increase in the company's reported profit before tax. However, the sustainability of this high return should be assessed alongside the company's equity base, earnings quality and cash flow performance.

Inventory Turnover Ratio

The inventory turnover ratio decreased slightly from 3.85 times in FY 2024–25 to 3.69 times in FY 2025–26, indicating a marginal slowdown in inventory movement. This suggests that inventory was converted into sales or consumed in operations at a slightly slower rate during the current year. The decline may indicate higher inventory holding or slower stock movement, although the exact cause would require further examination of inventory and sales data. The company should improve inventory planning, stock management and demand forecasting to minimise funds tied up in inventory.

Trade Receivable Turnover Ratio

The trade receivable turnover ratio improved from 14.01 times in FY 2024–25 to 15.70 times in FY 2025–26, indicating more efficient collection of trade receivables. This improvement suggests that the company is converting credit sales into cash more frequently during the year. Faster collection can strengthen liquidity and reduce the risk of overdue debts. Overall, the trend is favourable, although the company should continue to maintain effective credit policies and monitor outstanding receivables to sustain this improvement.

Trade Payable Turnover Ratio

The trade payable turnover ratio increased from 3.81 times in FY 2024–25 to 5.42 times in FY 2025–26, indicating that the company is settling its trade payables more frequently. This may reflect faster payments to suppliers or changes in the volume and timing of purchases. While timely payments can strengthen supplier relationships, faster payment may also increase short-term cash requirements. Therefore, the company should balance its payment practices with its operating cash flow and working capital needs.

Net Capital Turnover Ratio

The net capital turnover ratio declined from 10.07 times in FY 2024–25 to 6.07 times in FY 2025–26, indicating a reduction in the efficiency with which net capital employed in the operating cycle generated revenue. This decline may be associated with an increase in working capital investment or a change in sales relative to net capital. Although the ratio remains positive, the downward trend suggests that the company should review its capital utilisation and working capital management to improve operational efficiency.

Net Profit Ratio

The net profit ratio increased significantly from 1.46% in FY 2024–25 to 6.49% in FY 2025–26, indicating a substantial improvement in the company's profitability relative to revenue. This suggests that the company retained a higher proportion of its sales as net profit after accounting for relevant expenses. The improvement may reflect better cost management, lower finance costs or stronger operating performance. Nevertheless, the company should focus on sustaining profit margins while improving the conversion of accounting profits into operating cash flow.

Return on Capital Employed 

The return on capital employed increased from 14.10% in FY 2024–25 to 25.49% in FY 2025–26, demonstrating a considerable improvement in the returns generated from the company's capital employed. This indicates that the company utilised its long-term funding more effectively to generate operating returns. The increase is a positive indicator of operational and capital efficiency. However, maintaining this performance will depend on the company's ability to sustain operating profitability, control costs and use its capital productively.

Return on Investment

The return on investment increased from 8.43% in FY 2024–25 to 16.27% in FY 2025–26, indicating a substantial improvement in the returns generated from investments. This suggests that the company's investment performance strengthened during the current financial year. The higher return is favourable for assessing the effectiveness of capital allocation and the overall financial performance of the business. However, the sustainability of this improvement will depend on future earnings, investment efficiency and the risks associated with the company's investments.