Vadilal Chemicals Annual Report, Balance Sheet & Revenue

Vadilal Chemicals Limited Balance Sheet (Rs in Lakhs)

Vadilal Chemicals Limited Profit & Loss Statement (Rs in Lakhs)

Vadilal Chemicals Limited Consolidated Cash Flow Statement (Rs in Lakhs)

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

Cash Flow from Operating Activities:

The company generated a net positive cash flow of Rs. 724.06 lakhs from operating activities in FY2024, a significant increase from Rs. 51.96 lakhs in FY2023. This improvement was driven by a higher profit before tax of Rs. 450.88 lakhs, up from Rs. 424.74 lakhs in the previous year, along with adjustments for non-cash items like depreciation (Rs. 156.87 lakhs) and finance costs (Rs. 256.54 lakhs). A major factor was the favorable working capital changes, including a smaller decrease in inventories and trade receivables (Rs. 321.08 lakhs in FY2024 versus Rs. 507.36 lakhs in FY2023), coupled with an increase in trade payables and liabilities of Rs. 316.90 lakhs in FY2024. After accounting for taxes paid, the company achieved a strong cash flow from its core business operations, indicating healthier operating efficiency and cash generation.

Cash Flow from Investing Activities:

In FY2024, the company’s cash outflow from investing activities amounted to Rs. 695.10 lakhs, slightly lower than the Rs. 377.38 lakhs outflow in FY2023. The primary use of cash was for capital expenditures on property, plant, and equipment, which increased to Rs. 751.76 lakhs from Rs. 433.72 lakhs in FY2023. The company did generate some inflows from the sale of property (Rs. 46.42 lakhs) and interest income (Rs. 18.80 lakhs), but overall, the large capital expenditures resulted in a negative cash flow. This suggests that the company is investing significantly in asset acquisition and infrastructure expansion, though it remains a major drain on cash resources.

Cash Flow from Financing Activities:

Financing activities provided a net cash inflow of Rs. 336.41 lakhs in FY2024, compared to Rs. 315.64 lakhs in FY2023. This inflow was mainly due to proceeds from current borrowings (Rs. 771.77 lakhs) and repayment of non-current borrowings (Rs. 134.99 lakhs). The company also incurred finance costs (Rs. 248.21 lakhs) and paid dividends (Rs. 38.98 lakhs), slightly higher than in FY2023. Overall, the positive cash flow from financing activities reflects the company’s ability to raise funds to support its operational and investing needs, while managing debt and interest payments effectively.

Financial Ratios of Vadilal Chemicals Limited

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

Current Ratio:

The current ratio declined from 2 in 2023 to 1.22 in 2024. This indicates a weakening in the company's short-term liquidity position, as it now has fewer current assets to cover its current liabilities. While a ratio above 1 still means that the company can meet its short-term obligations, the significant drop suggests a potential strain on working capital management.

Debt-Equity Ratio:

The debt-equity ratio increased from 1.11 in 2023 to 1.28 in 2024, showing that the company has taken on more debt relative to its equity. A higher ratio indicates greater reliance on debt financing, which could lead to higher interest obligations and financial risk. However, the increase is moderate, so while the company is more leveraged, it is still within a reasonable range for debt management.

Debt Service Coverage Ratio (DSCR):

The DSCR fell slightly from 1.3 in 2023 to 1.1 in 2024, reflecting the company's marginally reduced ability to cover its debt obligations from its operating income. A DSCR above 1 means the company can still service its debt, but the decline indicates that debt repayment is becoming tighter, with less income left after covering interest and principal payments.

Return on Equity (ROE):

ROE decreased from 20.45% in 2023 to 17.26% in 2024, reflecting a drop in profitability relative to shareholders’ equity. While the ROE is still healthy, the decline suggests that the company is generating slightly lower returns for its investors, possibly due to increased expenses or reduced profit growth compared to the previous year.

Inventory Turnover Ratio:

The inventory turnover ratio dropped significantly from 42.86 in 2023 to 22.45 in 2024. This large decline indicates that the company is selling and replenishing its inventory at a slower rate, which could suggest reduced sales efficiency or excess inventory levels. A lower turnover might also indicate weaker demand or operational inefficiencies.

Trade Receivables Turnover Ratio:

The trade receivables turnover ratio remained relatively stable, at 7.05 in 2024 compared to 7.02 in 2023. This indicates that the company is consistently managing its credit sales and efficiently collecting receivables at the same rate in both years. A stable ratio reflects strong credit control and healthy cash flow management.

Trade Payable Turnover Ratio:

The trade payable turnover ratio dropped drastically from 126.99 in 2023 to 35.15 in 2024. This sharp decline implies that the company is taking longer to pay its suppliers and manage its payables, which could be a strategy to conserve cash. While this can help improve cash flow, it might strain relationships with suppliers if extended too much.

Net Capital Turnover Ratio:

The net capital turnover ratio rose sharply from 6.14 in 2023 to 15.16 in 2024. This significant increase shows that the company is generating much more revenue from its net capital, indicating higher operational efficiency. The company is using its working capital more effectively to drive sales, which is a positive sign for overall business performance.

Net Profit Ratio:

The net profit ratio improved slightly from 3.63% in 2023 to 3.84% in 2024, indicating a marginally better profitability margin. This ratio shows how much of the revenue is being converted into profit. While the improvement is small, it signals that the company is slightly more efficient in managing its costs relative to its revenue.

Return on Capital Employed (ROCE):

ROCE decreased slightly from 16.09% in 2023 to 14.94% in 2024. This indicates that the company is generating a lower return on the capital it employs, suggesting reduced efficiency in using both equity and debt to generate profits. However, the ROCE remains relatively healthy, showing that the company is still using its capital effectively, though with some decline.

Return on Investment (ROI):

The ROI dropped significantly from 46.31% in 2023 to 33.38% in 2024, reflecting a reduced return on the company’s investments. This decline may indicate that the investments made by the company in 2024 were less profitable compared to those in 2023, potentially due to higher costs or lower returns from its investment portfolio

Dividend History

 The company’s dividend history for the years 2024 and 2023 shows a consistent payout of Rs. 0.8 per share in both years. This indicates stability in the company’s dividend policy, providing shareholders with a steady return in terms of cash dividends.

The retained earnings increased from Rs. 992.11 lakhs in 2023 to Rs. 1,269.74 lakhs in 2024, reflecting a growth in the company’s cumulative profits after dividends have been distributed. Retained earnings represent the portion of net income that the company has decided to reinvest back into the business rather than paying out as dividends. The increase in retained earnings suggests that the company has generated higher profits in 2024 and is opting to reinvest a significant portion of those profits into operations or reserves, even while maintaining the same dividend payout per share.