Philips India Annual Reports, Balance Sheet and Financials

 Philips India Limited Balance Sheet (Rs in Millions)

 Philips India Limited Profit & Loss Statement (Rs in Millions)

 Philips India Limited Cash Flow Statement (Rs in Millions)

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

Cash Flow from Operating Activities: The cash flow from operating activities improved substantially, rising from Rs. 3,413 million in FY 2023 to Rs. 7,355 million in FY 2024. This increase is primarily driven by a higher operating profit before working capital changes, which rose from Rs. 4,209 million to Rs. 4,973 million. Key adjustments included a higher depreciation and amortization cost, up by Rs. 141 million, and increased allowances for doubtful receivables, which more than doubled. Additionally, there was a decrease in finance costs and a reduction in interest income, which was offset by significant increases in trade payables and other liabilities. This overall positive performance in cash generation reflects improved operational efficiency and better management of working capital.

Cash Flow from Investing Activities: The cash used in investing activities surged from Rs. 529 million in FY 2023 to Rs. 5,829 million in FY 2024. This sharp increase is mainly due to a significant rise in capital expenditures, with Rs. 6,049 million spent on purchasing Property, Plant, and Equipment compared to Rs. 1,256 million in the previous year. There were also notable decreases in interest received, down from Rs. 527 million to Rs. 65 million, and a drop in proceeds from the sale of assets. Despite receiving Rs. 39 million from the redemption of investments and Rs. 116 million in lease rental income, these inflows were insufficient to offset the large outflows, resulting in a substantial net cash outflow.

Cash Flow from Financing Activities: The financing activities also reflect a significant shift. The net cash used in financing activities decreased considerably from Rs. 13,925 million in FY 2023 to Rs. 917 million in FY 2024. This reduction is due to the absence of dividend payments, which had been substantial in the previous year (Rs. 12,941 million). Proceeds from borrowings and repayment of borrowings were balanced at Rs. 3,150 million each, while finance costs slightly increased, and principal repayments of lease liabilities decreased. The decrease in net cash used in financing activities indicates a more balanced approach to financing and a significant reduction in dividend payouts.

Net Increase in Cash and Cash Equivalents: Despite the large outflows in investing and financing activities, the cash and cash equivalents increased by Rs. 610 million in FY 2024, contrasting sharply with the Rs. 11,041 million decrease in the previous year. This improvement reflects the stronger cash generation from operating activities, partially offset by the high capital expenditures and changes in financing strategies. The ending cash position improved with cash and cash equivalents rising from Rs. 299 million at the beginning of the year to Rs. 984 million by the end, alongside a small increase in deposits with banks.

Financial Ratios of Philips India Limited

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

Current Ratio: The current ratio has slightly improved from 1.4 in FY 2022-23 to 1.5 in FY 2023-24. This increase indicates a marginal enhancement in the company's liquidity position, suggesting it has a better capacity to cover its short-term liabilities with its short-term assets. Although the ratio is above 1, indicating adequate liquidity, it is still essential to monitor this to ensure it remains sufficient to handle any potential financial strains.

Return on Equity (ROE): The ROE has increased significantly from 14.81% in FY 2022-23 to 18.91% in FY 2023-24. This notable rise demonstrates that the company has become more effective at generating profits from its shareholders' equity. An improved ROE reflects higher profitability and efficient use of equity capital, which is a positive indicator for investors.

Inventory Turnover Ratio: The inventory turnover ratio has decreased slightly from 3.4 in FY 2022-23 to 3.19 in FY 2023-24. This decline suggests that the company is taking slightly longer to sell its inventory, potentially indicating either slower sales or higher inventory levels. While the ratio remains relatively stable, it's crucial for the company to address any inefficiencies in inventory management to maintain a strong turnover.

Trade Receivables Turnover Ratio: The trade receivables turnover ratio has remained relatively stable, decreasing marginally from 6.82 in FY 2022-23 to 6.79 in FY 2023-24. This ratio indicates how efficiently the company is managing its receivables and collecting outstanding invoices. A stable ratio suggests consistent performance in managing receivables, although any further decline could imply slower collection periods.

Trade Payables Turnover Ratio: The trade payables turnover ratio has increased from 3.36 in FY 2022-23 to 3.61 in FY 2023-24. This increase signifies that the company is paying its suppliers more quickly, which could indicate improved liquidity or stronger supplier relationships. However, it also suggests that the company might be taking a shorter time to settle its trade payables, potentially affecting its working capital management.

Net Capital Turnover Ratio: The net capital turnover ratio has decreased from 9.14 in FY 2022-23 to 7.55 in FY 2023-24. This decline suggests that the company is generating less revenue per unit of net capital employed. A lower ratio indicates a reduction in capital efficiency, which could imply the need for better asset utilization or a review of capital allocation strategies.

Net Profit Ratio: The net profit ratio has slightly decreased from 4.53% in FY 2022-23 to 4.29% in FY 2023-24. This minor decline indicates a slight reduction in the company's profitability relative to its total sales. While the decrease is not substantial, it suggests that the company's profit margins have narrowed slightly, potentially due to increased costs or pricing pressures.

Return on Capital Employed (ROCE): The ROCE has decreased from 23.99% in FY 2022-23 to 22.01% in FY 2023-24. This reduction implies that the company’s efficiency in generating profits from its capital employed has decreased. Although still strong, the decline suggests that the company may need to focus on improving its capital utilization or cost management to sustain its high return levels.

Return on Investment (ROI): The ROI has improved from 6.86% in FY 2022-23 to 7.24% in FY 2023-24. This increase indicates that the company has enhanced its ability to generate returns on its investments. The improved ROI reflects better investment performance and effective utilization of invested capital, which is a positive sign for stakeholders.