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Atlantaa (NSE:ATLANTAA) Is Carrying A Fair Bit Of Debt

Simply Wall St · 3d ago

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.' So it seems the smart money knows that debt - which is usually involved in bankruptcies - is a very important factor, when you assess how risky a company is. We note that Atlantaa Limited (NSE:ATLANTAA) does have debt on its balance sheet. But is this debt a concern to shareholders?

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Why Does Debt Bring Risk?

Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. If things get really bad, the lenders can take control of the business. However, a more frequent (but still costly) occurrence is where a company must issue shares at bargain-basement prices, permanently diluting shareholders, just to shore up its balance sheet. Of course, debt can be an important tool in businesses, particularly capital heavy businesses. When we think about a company's use of debt, we first look at cash and debt together.

How Much Debt Does Atlantaa Carry?

You can click the graphic below for the historical numbers, but it shows that as of September 2025 Atlantaa had ₹2.95b of debt, an increase on ₹2.33b, over one year. However, because it has a cash reserve of ₹1.39b, its net debt is less, at about ₹1.56b.

debt-equity-history-analysis
NSEI:ATLANTAA Debt to Equity History December 18th 2025

A Look At Atlantaa's Liabilities

We can see from the most recent balance sheet that Atlantaa had liabilities of ₹2.25b falling due within a year, and liabilities of ₹1.11b due beyond that. On the other hand, it had cash of ₹1.39b and ₹548.9m worth of receivables due within a year. So it has liabilities totalling ₹1.43b more than its cash and near-term receivables, combined.

While this might seem like a lot, it is not so bad since Atlantaa has a market capitalization of ₹3.69b, and so it could probably strengthen its balance sheet by raising capital if it needed to. But it's clear that we should definitely closely examine whether it can manage its debt without dilution. There's no doubt that we learn most about debt from the balance sheet. But you can't view debt in total isolation; since Atlantaa 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 Atlantaa

In the last year Atlantaa had a loss before interest and tax, and actually shrunk its revenue by 51%, to ₹659m. To be frank that doesn't bode well.

Caveat Emptor

Not only did Atlantaa's revenue slip over the last twelve months, but it also produced negative earnings before interest and tax (EBIT). Indeed, it lost ₹136m at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. Another cause for caution is that is bled ₹501m in negative free cash flow over the last twelve months. So in short it's a really risky stock. When analysing debt levels, the balance sheet is the obvious place to start. However, not all investment risk resides within the balance sheet - far from it. Case in point: We've spotted 4 warning signs for Atlantaa you should be aware of, and 2 of them are potentially serious.

At the end of the day, it's often better to focus on companies that are free from net debt. You can access our special list of such companies (all with a track record of profit growth). It's free.