Mahindra Rural Housing Finance Limited Annual Report, Balance Sheet and Financials

Mahindra Rural Housing Finance Limited Balance Sheet (Rs in Lakhs)

Mahindra Rural Housing Finance Limited Profit & Loss Statement (Rs in Lakhs)

 Mahindra Rural Housing Finance Limited Consolidated Cash Flow Statement (Rs in Lakhs)

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

Cash Flow from Operating Activities

The company’s cash flow from operating activities reveals a significant shift from positive to negative cash flow. In 2024, the net cash used in operating activities was −9,086.17-9,086.17−9,086.17 lakhs, down from a positive 12,469.1212,469.1212,469.12 lakhs in 2023.

Profit Before Taxes: The profit before taxes decreased from 2,628.952,628.952,628.95 lakhs in 2023 to 484.17484.17484.17 lakhs in 2024, indicating a reduction in the company’s core profitability before adjusting for non-cash and financing items.

Adjustments for Non-Cash Items: Key adjustments include a high depreciation and amortization expense, which increased from 2,625.742,625.742,625.74 lakhs to 3,287.873,287.873,287.87 lakhs, reflecting the aging or acquisition of assets. A major component of the cash outflow comes from the impairment on financial instruments, which was 19,991.3519,991.3519,991.35 lakhs in 2024, only slightly lower than the previous year. Additionally, substantial interest income (−1,24,425.68-1,24,425.68−1,24,425.68 lakhs in 2024) and interest expenses (53,390.8553,390.8553,390.85 lakhs) indicate that the company has significant financial investments and borrowings.

Working Capital Changes: Working capital adjustments, such as changes in loans (−27,274.76-27,274.76−27,274.76 lakhs), other financial assets, and liabilities, show shifts in the company's operational liquidity. The considerable increase in loans reflects higher cash usage, suggesting more resources have been tied up in receivables or other financial instruments.

Interest and Tax Payments: High interest payments (−56,073.77-56,073.77−56,073.77 lakhs) and a slight reduction in net tax payments indicate that financing costs remain a substantial outflow. The overall cash used in operating activities indicates the company experienced increased operational costs or lower collections, impacting liquidity.

Cash Flow from Investing Activities

In 2024, the company had positive cash flow from investing activities, amounting to 82,936.6182,936.6182,936.61 lakhs, which is a notable improvement from the negative cash flow of −40,043.28-40,043.28−40,043.28 lakhs in 2023.

Investments: The company made significant purchases of investments totaling −3,16,944.65-3,16,944.65−3,16,944.65 lakhs, up from −1,92,700.22-1,92,700.22−1,92,700.22 lakhs, which demonstrates an aggressive investment strategy. However, proceeds from the sale of investments also increased to 3,29,284.053,29,284.053,29,284.05 lakhs, resulting in net cash inflows.

Term Deposits: A shift in term deposits was observed. Deposits with banks decreased to −91,203.47-91,203.47−91,203.47 lakhs, while withdrawals increased to 1,63,533.871,63,533.871,63,533.87 lakhs. This suggests the company is using previously locked-in cash resources to improve liquidity.

Capital Expenditure: Capital expenditure on property, plant, and equipment decreased to −1,880.47-1,880.47−1,880.47 lakhs, down from −4,160.44-4,160.44−4,160.44 lakhs, reflecting reduced spending on asset expansion or replacement, which could be a sign of cost control measures.

Overall, the positive cash flow from investing activities in 2024 mainly results from strategic investments and liquidity management, helping offset the cash used in operating activities.

Cash Flow from Financing Activities

The financing activities show a substantial cash outflow of −47,809.17-47,809.17−47,809.17 lakhs in 2024, a reversal from a positive cash inflow of 16,837.1016,837.1016,837.10 lakhs in 2023.

Debt Securities: The company issued debt securities worth 1,75,037.501,75,037.501,75,037.50 lakhs, while repaying 1,74,500.001,74,500.001,74,500.00 lakhs, resulting in a net cash flow effect close to zero for debt securities. This reflects refinancing efforts without major increases in debt levels.

Borrowings: The company saw inflows from other borrowings amounting to 82,700.0082,700.0082,700.00 lakhs but repaid 1,29,796.061,29,796.061,29,796.06 lakhs. The net repayment of borrowings indicates a reduction in overall debt levels, improving the long-term leverage situation but also creating cash outflows.

Lease Liabilities: Payments for lease liabilities amounted to −1,250.61-1,250.61−1,250.61 lakhs, which is relatively consistent, indicating ongoing fixed obligations without new lease commitments.

The significant cash outflow in financing activities shows that the company is focused on debt repayments, possibly as part of a strategy to strengthen its balance sheet by reducing debt.

Net Cash Movement and Closing Balance

The net increase in cash and cash equivalents for 2024 was 26,041.2726,041.2726,041.27 lakhs, a recovery from the decline of −10,874.59-10,874.59−10,874.59 lakhs in 2023. Consequently, cash and cash equivalents rose to 57,673.2657,673.2657,673.26 lakhs at the end of 2024 from 31,494.4631,494.4631,494.46 lakhs in 2023. This increase in cash reserves is primarily due to proceeds from investments and term deposits, which helped offset the high cash outflows in operating and financing activities.