Is Anjani Portland Cement (NSE:APCL) Using Debt In A Risky Way?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' 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 should shareholders be worried about its use of debt?

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When Is Debt Dangerous?

Debt assists a business until the business has trouble paying it off, either with new capital or with free cash flow. 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, plenty of companies use debt to fund growth, without any negative consequences. When we examine debt levels, we first consider both cash and debt levels, together.

How Much Debt Does Anjani Portland Cement Carry?

The chart below, which you can click on for greater detail, shows that Anjani Portland Cement had ₹4.63b in debt in September 2025; about the same as the year before. Net debt is about the same, since the it doesn't have much cash.

How Strong Is Anjani Portland Cement's Balance Sheet?

According to the last reported balance sheet, Anjani Portland Cement had liabilities of ₹2.34b due within 12 months, and liabilities of ₹5.01b due beyond 12 months. Offsetting these obligations, it had cash of ₹8.90m as well as receivables valued at ₹369.6m due within 12 months. So it has liabilities totalling ₹6.97b more than its cash and near-term receivables, combined.

The deficiency here weighs heavily on the ₹4.04b company itself, as if a child were struggling under the weight of an enormous back-pack full of books, his sports gear, and a trumpet. 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. When analysing debt levels, the balance sheet is the obvious place to start. But you can't view debt in total isolation; since Anjani Portland Cement will need earnings to service that debt. So when considering debt, it's definitely worth looking at the earnings trend. Click here for an interactive snapshot.

View 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 ₹5.0b, which is a fall of 3.0%. That's not what we would hope to see.

Caveat Emptor

Over the last twelve months Anjani Portland Cement produced an earnings before interest and tax (EBIT) loss. To be specific the EBIT loss came in at ₹255m. 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. It's fair to say the loss of ₹419m didn't encourage us either; we'd like to see a profit. And until that time we think this is a risky stock. The balance sheet is clearly the area to focus on when you are analysing debt. But ultimately, every company can contain risks that exist outside of the balance sheet. Case in point: We've spotted 3 warning signs for Anjani Portland Cement you should be aware of, and 2 of them shouldn't be ignored.

Of course, if you're the type of investor who prefers buying stocks without the burden of debt, then don't hesitate to discover our exclusive list of net cash growth stocks, today.

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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.