Merino Industries Limited Balance Sheet (Rs in Lakhs)

Merino Industries Limited Profit & Loss Statement (Rs in Lakhs)

Merino Industries Limited Cash Flow Statement (Rs in Lakhs)

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

Operating Activities: In 2024, the company reported a net profit before tax of ₹16,347.95 lakhs, slightly down from ₹17,410.05 lakhs in 2023. Adjustments to this profit include depreciation and amortization expenses, which rose to ₹7,386.53 lakhs from ₹6,698.45 lakhs, reflecting increased capital investments or asset base. Various gains and losses, including a net gain on fair value changes of derivatives and financial instruments, contributed to the complexity of the adjustments. Notably, the loss on fair valuation of financial instruments was substantial at ₹2,792.99 lakhs in 2024 compared to a gain in the previous year, indicating significant market fluctuations or investment losses.

Operating profit before working capital changes and other adjustments increased to ₹22,532.79 lakhs from ₹26,462.45 lakhs, reflecting overall operational strength despite the drop in net profit. Working capital changes showed significant impacts: trade receivables increased substantially by ₹3,798.82 lakhs, and inventories decreased, indicating tighter inventory management. The net cash flow from operating activities improved to ₹26,950.92 lakhs from ₹18,439.55 lakhs, showcasing stronger cash generation from core operations despite the negative profit impact.

Investing Activities: In 2024, the company experienced a net cash outflow of ₹35,421.68 lakhs from investing activities, an increase from ₹45,872.44 lakhs in 2023. Major outflows included the acquisition of property, plant, and equipment amounting to ₹34,623.59 lakhs and investments in intangible assets. These were partially offset by inflows from the sale of property and equipment, as well as interest and dividend income. The significant investment in capital assets suggests ongoing expansion or upgrades, though it also resulted in higher cash usage.

Financing Activities: The financing activities in 2024 resulted in a net cash inflow of ₹9,364.14 lakhs, compared to ₹24,666.75 lakhs in 2023. This decrease reflects reduced proceeds from non-current borrowings and a higher repayment of these borrowings. However, the increase in current borrowings by ₹13,359.77 lakhs provided liquidity. Other cash flows included payments for lease liabilities and finance costs, which were similar to the previous year. The decrease in net cash flow from financing activities indicates a shift towards lower external financing or higher debt repayments.

Overall Cash Flow: The net change in cash and cash equivalents was an increase of ₹893.37 lakhs in 2024, reversing the net decrease of ₹2,766.14 lakhs in 2023. This increase was supported by improved cash flow from operating activities and a reduction in cash outflows from investing activities. The cash and cash equivalents at the end of 2024 were ₹1,408.94 lakhs, significantly higher than ₹515.57 lakhs at the end of 2023. This increase, along with a decrease in cash credit, indicates improved liquidity and a stronger cash position going into the new fiscal year.

Financial Ratios of Merino Industries Limited

Here is a summary of the financial and operational metrics for Merino Industries Limited for the year 2024 and 2023:

Current Ratio: The current ratio measures the company’s ability to cover short-term liabilities with short-term assets. In 2024, it decreased to 1.13 from 1.39 in 2023. This decline suggests a slight weakening in liquidity.

Debt-to-Equity Ratio: This ratio reflects the company’s leverage by comparing its total debt to shareholders ' equity. The ratio increased slightly to 0.54 in 2024 from 0.50 in 2023. Although the increase is modest, it indicates a marginally higher reliance on debt relative to equity.

Debt Service Coverage Ratio (DSCR): The DSCR measures the company’s ability to meet its debt obligations from its operating income. In 2024, it decreased to 3.03 from 3.91 in 2023.

Return on Equity (ROE): ROE indicates the return generated on shareholders ' equity. In 2024, it slightly decreased to 9.32% from 9.83% in 2023. Despite the decrease, the ROE remains healthy, reflecting that the company continues to generate a reasonable return on equity, though slightly less effectively than in the previous year.

Inventory Turnover Ratio: This ratio measures how efficiently inventory is sold and replaced over a period. The ratio improved to 178 in 2024 from 165 in 2023, indicating more efficient inventory management and faster turnover. A higher ratio means the company is managing its inventory better, which can reduce holding costs and improve liquidity.

Trade Receivables Turnover Ratio: This ratio assesses the efficiency of collecting receivables. In 2024, it increased to 32 from 29 in 2023. The improvement suggests that the company is more effective at collecting payments from customers, which can enhance cash flow and reduce credit risk.

Trade Payables Turnover Ratio: This ratio measures how quickly the company pays its suppliers. In 2024, it increased to 50 from 45 in 2023, indicating a slower payment cycle. While this could signal better cash flow management, it might also suggest extended payment terms or slower payments to suppliers.

Net Capital Turnover Ratio: This ratio evaluates how effectively the company uses its net capital to generate sales. It improved to 10.85 in 2024 from 7.36 in 2023. The increase indicates that the company has become more efficient in using its capital to generate revenue, which can be a positive sign of improved operational effectiveness.

Net Profit Margin: The net profit margin reflects the percentage of revenue that remains as profit after all expenses. In 2024, it remained almost unchanged at 5.40% compared to 5.41% in 2023.

Return on Capital Employed (ROCE): ROCE measures the efficiency and profitability of capital investments. It decreased to 8.98% in 2024 from 10.91% in 2023. The decline indicates reduced effectiveness in generating profits from capital employed, which might be due to increased capital expenditure or lower operational efficiency.

Return on Investment (ROI): ROI evaluates the return generated on investments relative to their cost. The ratio significantly improved to 18.84% in 2024 from -1.59% in 2023.

Dividend history of Merino Industries Limited (In Rs. Lakhs)

 The reduction in the dividend per share from ₹9 to ₹5, despite an increase in retained earnings, suggests that Merino Industries Limited has opted to retain a larger portion of its profits for internal use or strategic investments rather than distributing it to shareholders. The increase in retained earnings indicates that the company has accumulated more profits over the year, potentially positioning itself for future growth or financial stability. The decrease in DPS could also reflect a decision to balance between rewarding shareholders and maintaining financial health, especially if there are substantial investments or capital requirements.