Revenue and Profitability Growth
In the fiscal year ending March 2025, Banganga Paper reported net sales of ₹58.10 crores, a substantial increase from just ₹0.39 crores in the previous year. This surge in revenue reflects the company's successful efforts to scale operations and capture market demand. Correspondingly, the total operating income rose sharply, driven solely by net sales as other operating income remained nil.
The company’s operating profit before depreciation, interest, and taxes (PBDIT) also improved dramatically, registering a positive ₹4.91 crores compared to a marginal loss in the prior year. This improvement was supported by an operating profit margin of 8.19%, reversing the negative margin of -7.69% recorded earlier. Gross profit margin followed a similar trend, reaching 7.02% in March 2025.
Banganga Paper’s profit after tax (PAT) stood at ₹1.88 crores, a significant turnaround from a loss of ₹0.02 crores the year before. The PAT margin improved to 3.24%, indicating better cost control and operational efficiency. Earnings per share (EPS) also reflected this positive shift, rising to ₹1.57 from a negative ₹0.80 in the previous year.
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Cost Structure and Expenditure
The company’s raw material costs rose in line with sales, reaching ₹52.97 crores in March 2025 from a minimal ₹0.31 crores the previous year. Employee costs also increased to ₹1.05 crores, reflecting the scaling of operations. Other expenses, including selling and distribution, remained relatively low or nil, contributing to the improved profitability.
Total expenditure excluding depreciation was ₹53.34 crores, up from ₹0.42 crores, but the company managed to maintain a positive operating profit due to the strong revenue growth. Interest expenses appeared for the first time at ₹0.83 crores, likely reflecting new borrowings to support expansion.
Balance Sheet and Financial Position
Banganga Paper’s balance sheet shows a significant increase in shareholder’s funds, rising to ₹15.61 crores from ₹0.28 crores. This was supported by an increase in equity capital and reserves. The company took on long-term borrowings amounting to ₹6.10 crores and short-term borrowings of ₹3.90 crores, indicating a leveraged approach to finance growth.
On the asset side, the company reported a gross block of ₹19.12 crores with accumulated depreciation of ₹2.10 crores, resulting in a net block of ₹17.02 crores. Current assets increased substantially to ₹20.52 crores, including inventories and sundry debtors, reflecting operational scale-up. Total liabilities rose to ₹39.01 crores from a negligible base, consistent with the increased borrowings and trade payables.
Cash Flow and Operational Efficiency
Cash flow from operating activities was negative at ₹2.00 crores, impacted by a ₹7.00 crore increase in working capital requirements. Investing activities showed an outflow of ₹19.00 crores, likely related to capital expenditure and asset acquisition. Financing activities provided a cash inflow of ₹22.00 crores, which helped balance the overall cash position, resulting in a neutral net cash flow for the year.
This pattern suggests that while the company is investing heavily in growth and managing working capital needs, it is relying on external financing to support these initiatives.
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Summary of Historical Performance
Overall, Banganga Paper’s historical performance over the last fiscal year reflects a company in transition from a near dormant state to an operationally active and profitable entity. The sharp increase in sales and operating profit, alongside improved margins and positive net profit, indicate successful business scaling. However, the company’s increased borrowings and negative operating cash flow highlight the need for careful financial management going forward.
Investors should note the company’s improved book value per share and earnings per share, which signal enhanced shareholder value. Yet, the reliance on external financing and working capital demands suggest that monitoring liquidity and debt servicing will be crucial in the near term.
Banganga Paper’s turnaround story is promising, but it remains essential to watch how the company sustains growth and profitability while managing its financial obligations.
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