Sangameshwar Coffee Estates Limited Annual Report and Financials

Sangameshwar Coffee Estates Limited Standalone Balance Sheet (Rs in Crores)

Sangameshwar Coffee Estates Limited Standalone Profit & Loss Statement (Rs in Crores)

Sangameshwar Coffee Estates Limited Standalone Cash Flow Statement (Rs in Crores)

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

Cash Flow from Operating Activities:
The operating performance of the company shows a significant turnaround during FY 2024–25, as it reported a profit before tax of ₹4.11 crore compared to a loss in the previous year. After adjusting for non-cash and non-operating items such as depreciation, interest expenses, and investment income, the operating profit before working capital changes became positive. However, the benefit of improved profitability was offset by substantial increases in inventories, trade receivables, and other assets, which led to a heavy outflow of cash. Due to this adverse movement in working capital, the company ended up reporting a negative net cash flow from operating activities of ₹3.13 crore, indicating that it is not effectively converting its accounting profits into cash.

Cash Flow from Investing Activities:
The investing activities generated a positive cash flow of ₹5.41 crore during the year. This inflow was mainly driven by the realization of investments, recovery of long-term loans, and income earned in the form of interest and dividends. The company made only a minimal investment in fixed assets, indicating limited capital expenditure and expansion during the year. Although the inflow is slightly lower than the previous year, it still reflects that the company is relying more on liquidation of investments and recovery of funds rather than deploying cash into new growth opportunities.

Cash Flow from Financing Activities:
The financing activities resulted in a net cash inflow of ₹3.65 crore, marking an improvement compared to the previous year’s outflow. This was primarily due to a significant increase in short-term borrowings, which supported the company’s liquidity position. At the same time, the company continued to repay its long-term borrowings and incurred interest expenses, reflecting ongoing financial commitments. The dependence on short-term borrowings suggests that the company is using external funding to manage its cash requirements, which could increase financial risk if such reliance continues.

Net Change in Cash and Cash Equivalents:
Overall, the company recorded a net increase in cash and cash equivalents of ₹5.94 crore during the year. This led to a closing cash balance of ₹22.67 crore, higher than the previous year. However, the increase in cash is largely attributed to positive cash flows from investing and financing activities, rather than operating activities. This indicates that while the liquidity position has improved, the sustainability of cash flows will depend on the company’s ability to strengthen its operational cash generation going forward.

Financial ratios of Sangameshwar Coffee Estates Limited

Summary of the financial ratios for the years 2025 and 2024:

Current Ratio:
The current ratio improved from 1.72 in FY 2023–24 to 1.81 in FY 2024–25, indicating a stronger short-term liquidity position. This suggests that the company has a better ability to meet its current liabilities using its current assets. The ratio being above 1 reflects a comfortable liquidity cushion, although the improvement is moderate.

Debt-Equity Ratio:
The debt-equity ratio increased from 0.70 to 0.78, indicating a slight rise in the company’s reliance on borrowed funds. While the ratio is still within a reasonable range, the upward trend suggests that the company is gradually increasing its financial leverage, which may lead to higher financial risk if not controlled.

Debt Service Coverage Ratio:
The DSCR improved significantly from -1.56 to 3.89, reflecting a strong recovery in the company’s ability to service its debt obligations. A negative ratio in the previous year indicated financial stress, whereas the current year’s high ratio shows that earnings are now sufficient to cover interest and principal repayments comfortably.

Return on Equity (ROE):
The return on equity turned positive at 11.17% compared to a negative -12.91% in the previous year. This indicates that the company has started generating profits for its shareholders after a loss-making period. The improvement reflects better profitability and efficient utilization of shareholders’ funds.

Inventory Turnover Ratio:
The inventory turnover ratio declined from 0.98 to 0.69, indicating slower movement of inventory during the year. This suggests that inventory is being held for a longer period, which may lead to higher holding costs and potential inefficiencies in inventory management.

Trade Receivables Turnover Ratio:
The trade receivables turnover ratio dropped sharply from 427.60 to 47.01. This indicates a significant slowdown in the collection of receivables, meaning that the company is taking longer to recover cash from its customers. This may adversely affect liquidity and working capital management.

Trade Payables Turnover Ratio:
The trade payables turnover ratio increased from 49.29 to 83.17, indicating that the company is paying its suppliers more quickly than before. While this may improve supplier relationships, it could also put pressure on cash flows if payments are made too quickly without matching inflows.

Net Capital Turnover Ratio:
The net capital turnover ratio decreased from 2.24 to 1.60, indicating a decline in the efficiency of using working capital to generate revenue. This suggests that more capital is tied up in operations relative to the level of sales, pointing towards reduced operational efficiency.

Net Profit Ratio:
The net profit ratio improved significantly from -13.34% to 11.91%, reflecting a strong turnaround in profitability. The company has moved from losses to a healthy profit margin, indicating better cost control and improved operational performance.

Return on Capital Employed:
The return on capital employed increased from -5.32% to 8.92%, showing improved efficiency in utilizing total capital for generating profits. Although the ratio is still moderate, the shift from negative to positive reflects a recovery in overall business performance.