Does Anjani Portland Cement (NSE:APCL) Have A Healthy Balance Sheet?

David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' It's only natural to consider a company's balance sheet when you examine how risky it is, since debt is often involved when a business collapses. We can see that Anjani Portland Cement Limited (NSE:APCL) does use debt in its business. But is this debt a concern to shareholders?

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When Is Debt A Problem?

Debt is a tool to help businesses grow, but if a business is incapable of paying off its lenders, then it exists at their mercy. Ultimately, if the company can't fulfill its legal obligations to repay debt, shareholders could walk away with nothing. While that is not too common, we often do see indebted companies permanently diluting shareholders because lenders force them to raise capital at a distressed price. Of course, the upside of debt is that it often represents cheap capital, especially when it replaces dilution in a company with the ability to reinvest at high rates of return. The first thing to do when considering how much debt a business uses is to look at its cash and debt together.

What Is Anjani Portland Cement's Debt?

The image below, which you can click on for greater detail, shows that at March 2025 Anjani Portland Cement had debt of ₹4.63b, up from ₹4.26b in one year. Net debt is about the same, since the it doesn't have much cash.

How Strong Is Anjani Portland Cement's Balance Sheet?

Zooming in on the latest balance sheet data, we can see that Anjani Portland Cement had liabilities of ₹2.24b due within 12 months and liabilities of ₹5.03b due beyond that. Offsetting this, it had ₹9.30m in cash and ₹257.0m in receivables that were due within 12 months. So it has liabilities totalling ₹7.01b more than its cash and near-term receivables, combined.

This deficit casts a shadow over the ₹4.61b company, like a colossus towering over mere mortals. So we'd watch its balance sheet closely, without a doubt. At the end of the day, Anjani Portland Cement would probably need a major re-capitalization if its creditors were to demand repayment. The balance sheet is clearly the area to focus on when you are analysing debt. But you can't view debt in total isolation; since Anjani Portland Cement will need earnings to service that debt. So if you're keen to discover more about its earnings, it might be worth checking out this graph of its long term earnings trend.

See our latest analysis for Anjani Portland Cement

Over 12 months, Anjani Portland Cement made a loss at the EBIT level, and saw its revenue drop to ₹4.3b, which is a fall of 31%. To be frank that doesn't bode well.

Caveat Emptor

Not only did Anjani Portland Cement's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Its EBIT loss was a whopping ₹652m. Considering that alongside the liabilities mentioned above make us nervous about the company. We'd want to see some strong near-term improvements before getting too interested in the stock. Not least because it had negative free cash flow of ₹44m over the last twelve months. So suffice it to say we consider the stock to be risky. There's no doubt that we learn most about debt from the balance sheet. But ultimately, every company can contain risks that exist outside of the balance sheet. For example, we've discovered 4 warning signs for Anjani Portland Cement (2 make us uncomfortable!) that you should be aware of before investing here.

If, after all that, you're more interested in a fast growing company with a rock-solid balance sheet, then check out our list of net cash growth stocks without delay.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.