How has been the historical performance of Arigato Universe?

Revenue and Operating Performance Trends

Over the past several years, Arigato Universe’s net sales have shown a remarkable surge, particularly in the fiscal year ending March 2025, where sales reached ₹7.12 crores, a substantial increase from ₹1.70 crores in the previous year. This growth follows a period of relatively modest sales figures, with revenues hovering below ₹0.5 crore in earlier years. Despite this top-line expansion, the company’s operating income has not translated into consistent profitability. Operating profit before depreciation, interest, and tax (PBDIT) excluding other income remained negative in most years, with a sharp decline to -₹3.81 crores in March 2025.

Other income has provided some cushioning, contributing between ₹0.23 crores and ₹0.56 crores annually, yet it has not been sufficient to offset the operating losses. The operating profit margin, excluding other income, has been negative for the majority of the period, reaching a low of -53.51% in the latest fiscal year. This indicates that despite increased sales, the company has struggled to control costs and generate operating profits.

Profitability and Earnings Analysis

Profit after tax (PAT) has mirrored the operating challenges, with the company reporting losses in the latest fiscal year amounting to -₹3.31 crores, a stark contrast to modest profits in preceding years. Earnings per share (EPS) have similarly declined, registering a negative ₹5.43 in March 2025 compared to positive EPS figures in earlier years. The PAT margin has swung from a healthy 14.12% in March 2024 to a negative 46.49% in the most recent year, underscoring the volatility in the company’s bottom line.

Interest expenses have remained minimal, with only a slight increase to ₹0.05 crores in the latest year, suggesting that financing costs have not been a major drag on profitability. However, the company’s total expenditure, excluding depreciation, surged to ₹10.94 crores in March 2025, significantly outpacing total operating income and contributing to the operating losses.

Balance Sheet and Financial Position

Arigato Universe’s balance sheet reveals a notable increase in total liabilities, rising from ₹11.30 crores in March 2024 to ₹17.44 crores in March 2025. This increase is largely attributable to the emergence of long-term borrowings amounting to ₹4.17 crores, which were absent in previous years. Current liabilities also expanded markedly, reflecting higher trade payables and other obligations.

Shareholders’ funds have declined from ₹10.57 crores to ₹7.26 crores over the same period, impacted by accumulated losses and reduced reserves. The book value per share has correspondingly decreased from ₹17.34 to ₹11.92. On the asset side, current assets have increased substantially to ₹12.14 crores, driven by higher inventories and sundry debtors, indicating a build-up in working capital requirements.

Cash Flow and Liquidity Considerations

Cash flow data for recent years is limited, but available figures indicate a negative cash flow from operating activities of ₹1 crore in March 2024, partially offset by investing cash inflows of the same amount. The company’s cash and bank balances have fluctuated, standing at ₹0.35 crores in the latest fiscal year. The absence of significant financing cash flows suggests limited external capital raising during this period.

Summary and Investor Implications

In summary, Arigato Universe has demonstrated a significant increase in sales in the most recent fiscal year, yet this growth has not translated into profitability. The company faces challenges in managing costs and improving operating margins, as reflected in persistent losses and declining shareholder equity. The rise in borrowings and current liabilities also signals increased financial risk, which investors should carefully consider.

While the company’s asset base has expanded, particularly in current assets, the build-up in working capital and trade payables may pressure liquidity. The negative earnings per share and shrinking book value per share further highlight the need for cautious evaluation. Prospective investors should weigh these factors alongside sector dynamics and market conditions before making investment decisions.

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