Kannapiran Mills Annual Reports, Balance Sheet and Financials

Sri Kannapiran Mills Limited Balance Sheet (Rs in Lakhs)

 Sri Kannapiran Mills Limited Profit & Loss Statement (Rs in Lakhs)

 Sri Kannapiran Mills Limited Cash Flow Statement (Rs in Lakhs)

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

Cash Flow from Operating Activities

In FY 2025, the company showed a strong turnaround in its operating performance. Profit before tax rose to ₹836.29 lakhs from a loss of ₹590.01 lakhs in FY 2024. After adding back non-cash expenses like depreciation and adjusting for interest paid, the operating profit before working capital changes reached ₹3,335.20 lakhs compared to ₹1,909.46 lakhs last year. The working capital movements were also favorable — receivables reduced significantly by ₹1,371.01 lakhs and inventories declined by ₹416.96 lakhs, though trade payables fell by ₹677.05 lakhs. Overall, cash generated from operations increased to ₹4,446.12 lakhs, and after taxes and extraordinary items, net operating cash stood at ₹4,347.52 lakhs, a big improvement over ₹1,695.08 lakhs in FY 2024. This indicates much stronger cash generation from core business operations.

Cash Flow from Investing Activities

The company reduced its capital expenditure in FY 2025. Purchases of fixed assets dropped sharply to ₹579.29 lakhs compared to ₹2,401.75 lakhs in FY 2024. Although proceeds from asset sales were lower at ₹19.34 lakhs versus ₹167.68 lakhs last year, the lower investments significantly reduced the cash outflow burden. Interest and dividend income together contributed about ₹57.91 lakhs. Consequently, the net cash used in investing activities was only ₹537.72 lakhs in FY 2025, a sharp improvement from the heavy outflow of ₹2,428.54 lakhs in FY 2024. This shows that the company controlled its investment spending, helping preserve liquidity.

Cash Flow from Financing Activities

Financing activities reflected a net outflow in FY 2025 compared to an inflow in FY 2024. No fresh long-term borrowings were raised in FY 2025, whereas in FY 2024, ₹2,602.48 lakhs were received. Repayments of long-term borrowings amounted to ₹1,554.35 lakhs, and short-term borrowings reduced by ₹843.77 lakhs in FY 2025, whereas in the previous year, short-term borrowings had increased by ₹1,859.95 lakhs. Interest payments also increased slightly to ₹1,743.49 lakhs from ₹1,769.04 lakhs. Overall, financing activities resulted in a large net outflow of ₹4,141.62 lakhs in FY 2025, compared to a net inflow of ₹853.27 lakhs in FY 2024. This indicates the company focused on debt repayment rather than raising new borrowings.

Net Cash Flow and Closing Balance

The combined effect of stronger operating cash, reduced investment outflows, and heavy financing repayments led to a net decrease in cash and cash equivalents of ₹331.82 lakhs in FY 2025. This contrasts with a net increase of ₹119.81 lakhs in FY 2024. The year ended with a cash balance of ₹280.84 lakhs, down from ₹612.66 lakhs at the end of FY 2024. While liquidity declined, the improvement in operating cash flow and reduction in debt reliance are positive signals for long-term financial health.

Financial Ratios of Sri Kannapiran Mills Limited

Summary of the financial ratios of Sri Kannapiran Mills Limited for the year 2025 and 2024:

Current Ratio

The current ratio stood at 1.03 in 2025, slightly lower than 1.05 in 2024. This indicates that the company just about has enough current assets to cover its current liabilities. While it is above 1, the margin is very thin, suggesting that liquidity is tight and the company may not have a strong buffer to handle short-term obligations comfortably.

Debt-Equity Ratio

The debt-equity ratio fell significantly to 0.21 in 2025 from 0.35 in 2024. This indicates the company reduced its reliance on external debt and strengthened its capital structure. A lower ratio reflects better financial stability and reduced risk, which is a positive sign for creditors and investors.

Debt Service Coverage Ratio (DSCR)

The DSCR improved sharply to 0.94 in 2025 from a very weak 0.26 in 2024. Although still just below 1, meaning earnings are still slightly insufficient to fully cover debt obligations, the improvement shows that the company is moving toward better debt-servicing ability. Continued improvements in operating performance could push this ratio above 1 in the coming years.

Return on Equity (ROE)

ROE turned positive at 5% in 2025, compared to a negative -5% in 2024. This shift shows that the company is again generating profits for its shareholders after losses in the previous year. While the return is modest, the reversal into profitability indicates better utilization of shareholder funds.

Inventory Turnover Ratio

The inventory turnover improved to 5.03 times in 2025 from 4.74 times in 2024. This means the company managed its stock more efficiently, selling goods faster and reducing holding periods. A higher turnover reflects improved demand or better inventory management practices.

Trade Receivable Turnover Ratio

The trade receivable turnover ratio declined slightly to 6.58 in 2025 from 7.23 in 2024. This suggests that the company is taking a little longer to collect payments from its customers compared to last year. While still at a decent level, the decline indicates some tightening of cash inflows from receivables.

Trade Payable Turnover Ratio

The trade payable turnover ratio increased to 5.76 in 2025 from 5.56 in 2024. This means the company is paying its suppliers slightly faster than before. While this may improve supplier relationships, it also reduces cash available in the short term, which could be a strain given the tight liquidity position.

Net Capital Turnover Ratio

The net capital turnover ratio rose significantly to 66.80 in 2025 from 29.63 in 2024. This shows that the company generated much higher sales relative to the capital employed in working capital. It reflects better efficiency in using its net working capital to drive revenue growth.

Net Profit Ratio

The net profit ratio turned positive at 1% in 2025, compared to a negative -1% in 2024. Though profitability remains modest, this marks an important turnaround from losses to profits. The thin margin, however, suggests that cost pressures remain and profitability needs to improve further.

Return on Capital Employed (ROCE)

ROCE increased to 9% in 2025 from 4% in 2024. This indicates that the company is now generating a better return on the overall funds employed in the business. The improvement reflects higher efficiency and better profitability compared to the previous year.