Kurlon Limited Annual Reports, Balance Sheet and Financials

Kanara Consumer Products Ltd Consolidated Balance Sheet (Rs in Lakhs)

 Kanara Consumer Products Ltd Consolidated Profit & Loss Statement (Rs in Lakhs)

Kanara Consumer Products Ltd Consolidated Cash Flow Statement (Rs in Lakhs)

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

Cash Flow from Operating Activities

In FY 2024-25, Kanara Consumer Products Ltd reported a profit before tax of ₹9,685.33 lakhs, compared to a much higher ₹1,51,954.72 lakhs in FY 2023-24. The major difference between the two years arises because FY 2023-24 had significant non-operating and exceptional gains such as profit on sale of investments (₹1,30,873.59 lakhs) and liabilities written back (₹23,267.02 lakhs), which inflated the prior year’s profit figure.

In FY 2025, after adjusting for non-cash and non-operating items like depreciation (₹385.78 lakhs), interest expenses (₹36.07 lakhs), and deducting income such as interest (₹3,929.49 lakhs), rental (₹306.53 lakhs), and dividend income (₹8 lakhs), the company’s operating cash flow before working capital changes stood at ₹2,888.24 lakhs — an improvement over the negative position of ₹1,641.91 lakhs in FY 2024.

The working capital adjustments were mostly favorable this year. Major positive contributions came from an increase in other liabilities (₹8,503.88 lakhs) and other financial assets (₹4,137.41 lakhs). However, there were some negative movements due to a decrease in trade payables (₹944.53 lakhs) and an increase in loans (₹1,755.07 lakhs).

After accounting for working capital and taxes, the company generated net operating cash inflows of ₹9,489.49 lakhs, compared to a heavy outflow of ₹62,347.44 lakhs in the previous year. This represents a strong turnaround in operating efficiency and cash management, suggesting that the core business operations have stabilized, even if profitability is much lower in absolute terms.

Cash Flow from Investing Activities

The company’s investing activities in FY 2025 resulted in a net cash outflow of ₹41,587.00 lakhs, compared to a huge inflow of ₹1,37,170.80 lakhs in FY 2024. The contrast is mainly due to the absence of one-time gains from sale of long-term investments, which had contributed ₹1,80,717.48 lakhs in the previous year.

During FY 2025, the company invested heavily in securities (₹60,813.36 lakhs), and also made moderate capital expenditure of ₹1,848.89 lakhs on property, plant, and equipment. On the positive side, deposits matured during the year provided an inflow of ₹16,155.67 lakhs, and interest received amounted to ₹4,132.36 lakhs.

Overall, while the company generated strong operating inflows, these were offset by large investments — likely aimed at redeploying funds into financial instruments or growth assets. The heavy investing outflow indicates that the company is using its liquidity for long-term positioning rather than immediate returns.

Cash Flow from Financing Activities

In FY 2025, financing activities resulted in a net outflow of ₹13,099.80 lakhs, compared to ₹27,236.74 lakhs in FY 2024. The main outflows were due to buyback of shares including taxes (₹11,878.86 lakhs) and dividend payment (₹1,413.57 lakhs). These two actions indicate that the company returned a substantial portion of capital to its shareholders during the year.

Apart from that, short-term borrowings saw a small net inflow of ₹228.70 lakhs, and interest payments were limited to ₹36.07 lakhs, reflecting low debt dependency. In comparison, the previous year had seen significant debt repayments (₹24,323.36 lakhs) and lease payments (₹1,097.23 lakhs).

Thus, the financing section shows that the company reduced its external financial obligations and focused on rewarding shareholders, even as it limited new borrowing activities.

Net Movement in Cash and Cash Equivalents

Overall, the company saw a net decrease in cash and cash equivalents by ₹45,197.32 lakhs during FY 2025, compared to a positive movement of ₹47,586.62 lakhs in FY 2024. This decline was mainly because the large cash inflows from investment sales in the previous year were not repeated, and the company instead undertook significant fresh investments and shareholder payouts in FY 2025.

Despite this reduction, the company still closed the year with a healthy cash balance of ₹3,080.72 lakhs, compared to ₹48,278.04 lakhs at the beginning of the year. This indicates that while liquidity levels have dropped sharply, the company continues to maintain sufficient cash reserves to support its operational needs.

Consolidated Financial Ratios of Kanara Consumer Products Ltd

 Summary of the financial ratios of Kanara Consumer Products Ltd for the year 2025 and 2024:

Current Ratio

The current ratio dropped sharply from 42.72 in FY 2023-24 to 9.47 in FY 2024-25. This means that while the company still holds more than enough current assets to meet its short-term obligations, its liquidity cushion has reduced significantly. The fall indicates that the company may have utilized a portion of its liquid assets or investments during the year, possibly for buybacks, dividends, or new investments. However, a ratio of 9.47 still suggests strong short-term solvency and no immediate liquidity concern.

Debt-Equity Ratio

The debt-equity ratio fell from 1.08 in FY 2023-24 to 0.00 in FY 2024-25, indicating that the company is now virtually debt-free. This reflects a major reduction in reliance on borrowed funds and highlights the company’s strong equity base and self-financed operations. The shift from moderate leverage to a fully equity-funded structure improves financial stability and reduces interest obligations, though it may limit the potential leverage benefits on returns.

Debt Service Coverage Ratio (DSCR)

The debt service coverage ratio deteriorated from -0.55 to -3.82, suggesting that the company’s cash flow from operations was insufficient to cover its debt servicing obligations during the year. Although the company has nearly no debt at present, the negative DSCR may result from accounting losses or lower earnings before interest and taxes. This indicates that during the year, operating income was not adequate to comfortably service any existing or residual finance costs.

Return on Equity (ROE)

The return on equity improved from a negative -0.16 in FY 2023-24 to a positive 0.06 in FY 2024-25. This turnaround shows that the company has started generating a small but positive return for its shareholders. The improvement suggests better profitability and more efficient use of shareholders’ funds, though the absolute level remains modest, implying that earnings are still not very strong relative to equity capital.

Inventory Turnover Ratio

The inventory turnover ratio declined from 3.85 times in FY 2023-24 to 1.21 times in FY 2024-25. This drop means that inventory is being sold or used at a much slower pace compared to the previous year. The lower turnover could point to slower sales, higher stock accumulation, or potential inefficiencies in inventory management. The company may need to optimize stock levels to improve cash flow and operational efficiency.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio decreased from 14.63 times to 5.96 times, indicating that the company is collecting payments from customers at a slower rate than before. A declining receivables turnover ratio suggests that either sales terms have become more lenient or collection efficiency has weakened. This could tie up working capital and impact liquidity if not managed properly.

Trade Payables Turnover Ratio

The trade payables turnover ratio fell from 5.23 times to 3.00 times, meaning the company is now taking longer to pay its suppliers. While this can improve short-term liquidity, it might also affect supplier relationships if delays become excessive. The decline indicates that Kanara Consumer Products Ltd is managing its cash outflows more conservatively compared to the previous year.

Net Capital Turnover Ratio

The net capital turnover ratio dropped dramatically from 32.05 to 0.03, suggesting that the company’s ability to generate revenue from its working capital base has fallen drastically. This may be due to reduced sales activity or a large buildup of current assets relative to turnover. The extremely low ratio points to underutilization of capital, signaling that funds are tied up in assets without proportionate revenue generation.

Net Profit Ratio

The net profit ratio improved slightly from 2.68% in FY 2023-24 to 3.31% in FY 2024-25, reflecting a marginal enhancement in profitability. This suggests that despite lower turnover and operational challenges, the company managed to control costs better and maintain margins. The improvement, though modest, indicates a step in the right direction toward stabilizing operations and improving efficiency.

Return on Capital Employed (ROCE)

The return on capital employed declined sharply from 1.18 in FY 2023-24 to 0.08 in FY 2024-25. This shows that the company’s overall efficiency in generating returns from total capital employed has weakened. The fall could be attributed to lower operating profits and high levels of idle or underutilized capital. Despite positive profitability, returns remain low, signaling a need for better capital deployment.

Return on Investment (ROI)

The return on investment fell slightly from 0.13 to 0.10, indicating that the company’s returns from its investments have marginally declined. This may be due to changes in investment mix or lower yields from financial instruments compared to the previous year. However, maintaining a positive ROI shows that investments are still generating income, albeit at a reduced rate.