Pearl Apartments Limited Annual Reports, Balance Sheet & Financials

Pearl Apartments Limited Standalone Balance Sheet (Rs in Hundreds)

Pearl Apartments Limited Standalone Profit & Loss Statement (Rs in Hundreds)

Pearl Apartments Limited Standalone Cash Flow Statement (Rs in Hundreds) 

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

Cash Flow from Operating Activities

The company reported a negative operating cash flow of -54,202.04 (Rs in hundreds) in FY 2025, compared to a strong positive 50,535.77 in FY 2024, indicating a significant deterioration in core business cash generation. Despite a non-cash boost from depreciation (31,820.39), operations were heavily impacted by a sharp increase in trade receivables (-53,175.66), suggesting delayed collections or rising credit sales. Additionally, trade payables decreased (-13,786.27), meaning the company paid off suppliers, further draining cash. Although tax refunds/inflows (19,519.38) provided some relief, they were insufficient to offset operational inefficiencies. Overall, the shift from positive to negative operating cash flow reflects weak working capital management and poor cash realization from business operations.

Cash Flow from Investing Activities

The company recorded a very strong positive investing cash flow of 2,14,532.02 in FY 2025, compared to a negative outflow of -14,076.76 in FY 2024. This sharp improvement is primarily due to a large inflow from losing control of subsidiaries (2,45,400), which suggests divestment or sale of business units. However, there were still outflows toward acquisition of subsidiaries (24,898.48) and other investing expenses. This indicates a major restructuring or portfolio shift, where the company is selling off certain assets while selectively investing in others. The large inflow significantly boosted overall liquidity, but since it is non-recurring in nature, it may not be sustainable going forward.

Cash Flow from Financing Activities

Financing activities show a net outflow of -1,51,607.6 in FY 2025, compared to -40,640.49 in FY 2024, indicating increased cash outflow. The major reason is negative proceeds from borrowings (-1,48,220.5), which implies repayment of debt rather than raising new funds. Interest payments were relatively stable. This reflects a deleveraging strategy, where the company is reducing its debt burden. While this improves long-term financial stability, it also puts pressure on short-term liquidity, especially when operating cash flows are negative.

Net Cash Position

Despite weak operating performance and high financing outflows, the company reported a net increase in cash of 8,722.38 in FY 2025, compared to a decline in FY 2024 (-4,181.48). This improvement is entirely driven by the large one-time inflow from investing activities. As a result, closing cash balance increased to 10,668.27 from 1,945.89. However, the sustainability of this improved cash position is questionable, as it depends heavily on non-operational inflows rather than core business strength. 

Financial ratios of Pearl Apartments Limited

Summary of financial ratios for the years 2025 and 2024:

Current Ratio

The current ratio increased sharply to 14.50 in FY 2025 from 0.43 in FY 2024, indicating a massive improvement in short-term liquidity. A ratio below 1 in FY 2024 reflected an inability to meet short-term obligations, whereas the extremely high ratio in FY 2025 suggests excess current assets over liabilities. However, such an unusually high ratio may also indicate inefficient utilization of resources, possibly due to large cash inflows (as seen in investing activities), rather than strong operational performance.

Debt-Equity Ratio

The debt-equity ratio is not reported in FY 2025, compared to 0.07 in FY 2024, which was already very low, indicating minimal reliance on debt. The absence of the ratio in FY 2025 likely suggests negative net worth (due to accumulated losses) or negligible debt levels. This aligns with the company’s deleveraging trend, but also signals potential erosion of shareholder equity, which is a concern.

Debt Service Coverage Ratio

The DSCR improved to 4.60 in FY 2025 from 3.32 in FY 2024, indicating better ability to service debt obligations. A ratio above 1 is considered healthy, and this improvement suggests that despite weak profitability, the company had sufficient earnings or cash support (possibly from non-operating sources) to meet its debt servicing requirements comfortably.

Return on Equity

ROE deteriorated further to -43.48% in FY 2025 from -26.55% in FY 2024, reflecting increasing losses for shareholders. Negative ROE indicates that the company is not generating returns but instead eroding shareholder value. The worsening trend highlights continued financial stress and lack of profitability, making it unattractive from an investor’s perspective.

Net Capital Turnover Ratio

The net capital turnover ratio improved to 0.09 in FY 2025 from -0.21 in FY 2024. While the improvement indicates better utilization of capital compared to the previous year, the ratio remains very low, suggesting that the company is still inefficient in generating revenue from its capital base. The negative ratio in FY 2024 also indicates operational inefficiencies in the past.

Net Profit Ratio

The net profit ratio declined significantly to -6.37 in FY 2025 from -1.33 in FY 2024, showing a sharp increase in losses relative to revenue. This indicates deteriorating operational performance, rising costs, or reduced income. The deepening negative margin reflects poor cost control and weak business fundamentals.

Return on Capital Employed

ROCE fell drastically to 0.02% in FY 2025 from 0.63% in FY 2024, indicating almost negligible returns on the capital employed in the business. This suggests that the company is unable to efficiently utilize its long-term funds to generate profits, highlighting poor operational efficiency and low productivity of assets.