How has been the historical performance of AksharChem (I)?

Revenue and Profitability Trends

In the fiscal year ending 31 March 2016, AksharChem (I) reported net sales of ₹187.71 crores, a decrease from ₹199.82 crores in the previous year. Other operating income also declined marginally, resulting in total operating income of ₹187.83 crores compared to ₹200.13 crores in FY 2014-15. Despite this dip in top-line revenue, the company managed to reduce its raw material costs from ₹118.08 crores to ₹106.52 crores, contributing to a more efficient cost structure.

Operating expenses excluding depreciation fell to ₹155.48 crores from ₹172.61 crores, reflecting tighter control over manufacturing expenses and purchase of finished goods. Employee costs saw a moderate increase to ₹6.25 crores from ₹5.76 crores, indicating investment in human resources.

These cost efficiencies translated into a higher operating profit before depreciation and interest (PBDIT) of ₹33.52 crores, up from ₹29.51 crores the previous year. The operating profit margin improved significantly to 17.22% from 13.75%, signalling enhanced operational leverage despite lower sales.

Profitability and Earnings Per Share

Interest expenses remained stable at ₹3.35 crores, while depreciation increased slightly to ₹4.24 crores. Profit before tax rose to ₹25.93 crores from ₹23.51 crores, supported by the absence of exceptional items that had impacted the prior year. The effective tax outgo increased to ₹9.29 crores, reflecting higher taxable profits.

Consequently, the company’s profit after tax (PAT) improved to ₹16.64 crores, up from ₹16.00 crores, with the PAT margin rising to 8.86% from 7.99%. Earnings per share (EPS) correspondingly increased to ₹22.75 from ₹21.88, indicating enhanced shareholder value.

Balance Sheet Strength and Asset Management

AksharChem (I) strengthened its financial position with shareholder’s funds rising to ₹85.01 crores from ₹71.45 crores, driven by an increase in reserves to ₹77.69 crores from ₹64.14 crores. The company’s total liabilities increased moderately to ₹155.11 crores from ₹146.48 crores, reflecting higher borrowings.

Long-term borrowings rose to ₹6.51 crores from ₹2.13 crores, while short-term borrowings increased to ₹22.23 crores from ₹20.77 crores. Despite this, the company maintained a healthy net block of fixed assets at ₹56.43 crores, slightly up from ₹54.82 crores, supported by capital work in progress which more than doubled to ₹3.83 crores.

Current assets remained stable at ₹70.63 crores, with inventories reducing to ₹15.98 crores from ₹18.15 crores and sundry debtors increasing to ₹22.79 crores from ₹21.01 crores. Net current assets improved significantly to ₹15.34 crores from ₹5.18 crores, indicating better working capital management.

Cash Flow and Liquidity

Cash flow from operating activities declined to ₹13.30 crores from ₹28.20 crores, impacted by a negative change in working capital of ₹11.10 crores compared to a positive ₹5.52 crores the previous year. Cash flow from investing activities remained negative at ₹10.94 crores, reflecting ongoing capital expenditure, while financing activities saw a reduced outflow of ₹2.40 crores versus ₹15.23 crores earlier.

Overall, the net cash position was nearly neutral with a marginal outflow of ₹0.03 crores, leaving closing cash and cash equivalents at ₹0.58 crores, slightly down from ₹0.61 crores. The company’s contingent liabilities decreased substantially to ₹2.42 crores from ₹7.55 crores, reducing potential off-balance sheet risks.

Summary of Historical Performance

AksharChem (I) exhibited a resilient financial profile in FY 2015-16, managing to improve profitability margins despite a decline in sales. The company’s focus on cost control and operational efficiency contributed to higher operating and net profit margins. Strengthened reserves and shareholder equity underpin a solid balance sheet, while manageable debt levels and improved working capital reflect prudent financial management.

Though cash flow from operations moderated, ongoing investments and reduced financing outflows suggest a balanced approach to growth and capital structure. The reduction in contingent liabilities further enhances the company’s risk profile. Overall, AksharChem (I) has demonstrated steady historical performance with positive indicators for sustainable value creation.

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