Revenue and Profitability Trends
Net sales for Asi Industries peaked in the fiscal year ending March 2018 at over ₹314 crores, before gradually declining to ₹238 crores by March 2022. This downward trend reflects a contraction of approximately 24% over four years. Operating income mirrored this pattern, with total operating income falling from ₹314 crores in 2018 to ₹238 crores in 2022.
Profitability has been notably volatile. Operating profit before other income (PBDIT excl OI) was robust in earlier years, reaching above ₹50 crores between 2017 and 2019. However, the fiscal year ending March 2022 saw a significant downturn, with operating profit turning negative to nearly -₹14 crores. Despite other income providing some relief, the overall operating profit remained in the red at approximately -₹9 crores.
Interest expenses have remained relatively stable, fluctuating between ₹7 crores and ₹14 crores annually, with a slight increase to ₹11.88 crores in 2022. Depreciation charges have steadily risen, reaching ₹43.66 crores in 2022, reflecting increased asset base or ageing infrastructure.
Consequently, profit before tax swung from positive territory in previous years—peaking near ₹31 crores in 2017—to a substantial loss of over ₹63 crores in 2022. This translated into a net loss after tax of nearly ₹56 crores in 2022, a stark contrast to consistent profits in the range of ₹7.7 crores to ₹31.4 crores in prior years.
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Cost Structure and Margins
Examining the cost components reveals some shifts. Raw material costs appeared only in 2022 at ₹61.44 crores, while purchase of finished goods has decreased from over ₹108 crores in 2017 to zero in 2022, indicating possible changes in sourcing or production strategy. Employee costs have risen moderately from ₹36 crores in 2016 to over ₹42 crores in 2022, while power costs have also increased, reaching nearly ₹40 crores in 2022.
Other expenses surged to ₹120 crores in 2022 from negligible amounts in earlier years, contributing to the elevated total expenditure of ₹252 crores in 2022, which exceeded operating income and pressured margins. Operating profit margins, excluding other income, declined sharply from a healthy 19.2% in 2016 to a negative 5.95% in 2022. Similarly, gross profit margins fell into negative territory in 2022 after maintaining double-digit percentages in prior years.
Balance Sheet and Financial Position
Asi Industries’ balance sheet reflects significant changes. Shareholder’s funds increased steadily from ₹219 crores in 2017 to ₹292 crores in 2022, supported by reserves that rose to over ₹283 crores in 2022. However, total liabilities decreased markedly from ₹734 crores in 2021 to ₹454 crores in 2022, largely due to a reduction in both long-term and short-term borrowings. Long-term borrowings dropped from nearly ₹160 crores in 2021 to ₹85 crores in 2022, while short-term borrowings fell sharply from ₹143 crores to ₹24 crores over the same period.
Asset-wise, net block values declined from ₹485 crores in 2021 to ₹224 crores in 2022, indicating asset disposals or impairments. Current assets remained relatively stable around ₹180 crores in 2022, with a notable increase in current investments to ₹49 crores. The company’s book value per share adjusted for equity stood at ₹22.91 in 2022, down from ₹29.26 in 2021, reflecting the impact of recent losses.
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Cash Flow and Liquidity
Cash flow analysis shows that operating cash flows have fluctuated, with ₹60 crores generated in 2022, down from ₹70 crores in 2020 but higher than ₹29 crores in 2021. Investing activities saw a significant inflow of ₹142 crores in 2022, contrasting with outflows in previous years, possibly due to asset sales or investment realisations. Financing activities recorded a large outflow of ₹204 crores in 2022, reflecting debt repayments or capital restructuring.
Net cash inflow/outflow was marginally negative at ₹-2 crores in 2022, consistent with the prior year. Closing cash and cash equivalents stood at ₹5 crores in 2022, down from ₹7 crores in 2021, indicating tight liquidity but not critical distress.
Summary
Overall, Asi Industries has faced a challenging period marked by declining revenues, squeezed margins, and a significant net loss in the latest fiscal year. The company’s efforts to reduce debt and improve cash flow are notable positives amid operational headwinds. Investors should weigh these factors carefully, considering the company’s historical profitability against recent setbacks and balance sheet adjustments.
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