Rakan Steels Limited Annual Report and Financials

Rakan Steels Limited Standalone Balance Sheet (in Rs)

Rakan Steels Limited Standalone Profit & Loss Statement (in Rs)

Rakan Steels Limited Standalone Cash Flow Statement (in Rs) 

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

Cash Flow from Operating Activities

Rakan Steels Limited generated net cash flow from operating activities of ₹1,99,75,560 during FY 2024-25 as compared to ₹1,74,17,654 in FY 2023-24, reflecting improvement in operational cash generation. The increase was supported by higher operating profit before working capital changes, which rose to ₹80,63,297 from ₹75,56,336 in the previous year. Significant cash inflows were generated from reduction in trade receivables and inventory, indicating improved collection efficiency and better inventory management. However, decrease in current liabilities resulted in cash outflow during the year. Despite tax payments and working capital adjustments, the company maintained strong positive cash flows from core business operations, demonstrating sound operational efficiency and effective working capital management.

Cash Flow from Investing Activities

Net cash used in investing activities stood at ₹46,36,385 during FY 2024-25 as against ₹1,11,88,181 in FY 2023-24. The outflow was mainly attributable to purchase of fixed assets amounting to ₹92,41,388, indicating continued investment in business infrastructure and operational assets. However, the investing cash outflow reduced substantially compared to the previous year, suggesting relatively lower capital expenditure during the current year.

Cash Flow from Financing Activities

Cash outflow from financing activities increased to ₹1,46,89,274 during FY 2024-25 from ₹70,05,509 in FY 2023-24. The major outflows were repayment of long-term borrowings amounting to ₹90,56,500 and payment of interest and financial charges of ₹56,32,774. This indicates that the company focused on reducing debt obligations during the year, which may strengthen its long-term financial position.

Net Cash Flow During the Year

The company reported a net cash inflow of ₹6,49,901 during FY 2024-25 as against a net cash outflow of ₹7,76,036 in the previous year. This improvement reflects stronger operating cash flows which were sufficient to partially offset investing and financing cash outflows.

Financial ratios of Rakan Steel Limited:

Summary of the Ratios for the years 2025 and 2024:

Current Ratio

The current ratio of Rakan Steel Limited improved from 4.17 in FY 2023-24 to 5.18 in FY 2024-25. This indicates a stronger liquidity position and reflects the company’s improved ability to meet its short-term obligations using current assets. A higher current ratio generally suggests better financial stability and efficient working capital management.

Debt Equity Ratio

The debt equity ratio decreased from 1.88 in the previous year to 1.58 during FY 2024-25. This decline indicates a reduction in dependence on borrowed funds and an improvement in the company’s capital structure. Lower leverage reflects comparatively better financial risk management and improved solvency position.

Debt Service Coverage Ratio (DSCR)

The debt service coverage ratio stood at 2.72 in FY 2023-24, whereas no ratio has been reported for FY 2024-25. In the previous year, the ratio indicated adequate earnings to service debt obligations. Non-reporting in the current year may be due to absence of term debt obligations or changes in borrowing structure.

Return on Equity Ratio (ROE)

The return on equity ratio improved from 0.01 to 0.02 during FY 2024-25. Although the increase is marginal, it reflects a slight improvement in profitability generated from shareholders’ funds. However, the ratio still remains low, indicating limited returns to equity shareholders.

Inventory Turnover Ratio

The inventory turnover ratio declined from 2.24 to 1.73 during FY 2024-25. This indicates relatively slower movement of inventory compared to the previous year, which may suggest lower sales volume, higher inventory holding, or slower inventory conversion efficiency.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio increased marginally from 5.46 to 5.59. This reflects slightly improved efficiency in collection of receivables and indicates that the company has maintained effective credit management practices during the year.

Trade Payables Turnover Ratio

The trade payables turnover ratio reduced significantly from 28.67 in FY 2023-24 to 12.78 in FY 2024-25. This suggests that the company took comparatively longer time to pay its suppliers during the current year, possibly due to working capital management strategies or changes in credit terms.

Net Capital Turnover Ratio

The net capital turnover ratio decreased from 1.44 to 1.09 during FY 2024-25. This indicates comparatively lower efficiency in utilizing working capital to generate revenue during the year.

Net Profit Ratio

The company reported a net profit ratio of 0.01 in FY 2024-25 as against no significant profit margin in the previous year. This reflects improvement in profitability, though the margin remains very low, indicating limited earnings relative to revenue.

Return on Capital Employed (ROCE)

The return on capital employed remained stable at 0.06 in both FY 2024-25 and FY 2023-24. This indicates that the company maintained a consistent level of efficiency in generating returns from the total capital employed in the business.

Return on Investments

The return on investments increased from 0.02 to 0.03 during FY 2024-25. This improvement indicates better earnings generated from investment activities compared to the previous year.