Kindly Ignore the deletions done by mistake earlier.
Cash Flow Observations:
- Cash from Operating Activities (CFO):
• Significant improvement in CFO from March 2021 (₹2.25 Cr) to March 2024 (₹12.55 Cr).
• A notable increase in profit from operations, from ₹3.12 Cr in 2021 to ₹13.56 Cr in 2024.
• Working capital changes have negatively impacted CFO, especially in 2024 (-₹22.96 Cr), which suggests the company might be tying up more funds in receivables or inventory.
- Cash from Investing Activities (CFI):
• Investing activities show consistent cash outflows, with March 2024 recording a significant outflow of ₹18.13 Cr. This is primarily due to fixed asset purchases (₹11.58 Cr in 2024).
• This indicates the company is actively investing in expansion or upgrades, which could be a positive sign for future growth.
- Cash from Financing Activities (CFF):
• Inflows from financing activities were strong in March 2024 (₹19.87 Cr), mainly driven by proceeds from borrowings (₹17.04 Cr). This suggests the company is leveraging debt for expansion or operational needs.
• Debt repayment is also evident, indicating the company is managing its obligations.
- Net Cash Flow:
• Net cash flow turned positive in March 2024 (₹10.81 Cr) after being negative in previous years, indicating an overall improvement in liquidity.
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Key Insights and Considerations:
• Positive Cash Flow Trend: The improvement in operating cash flow and net cash flow reflects better financial management and operational efficiency.
• High Borrowings: The rise in borrowings highlights a reliance on debt, which must be monitored to ensure it doesn’t overburden the company.
• Capex Focus: Substantial investments in fixed assets indicate a focus on growth and capacity expansion, but it’s crucial to ensure these investments translate into revenue growth.
• Corporate Governance: Since this is a micro-cap company, evaluating the transparency and governance practices is essential.