How has been the historical performance of Coffee Day Enter?

Revenue and Operating Performance Trends

Over the past six years, Coffee Day Enter’s net sales have shown considerable volatility. The company’s revenue peaked in the fiscal year ending March 2020 at ₹2,552.44 crores, before sharply declining to ₹581.58 crores in March 2022. Since then, revenues have gradually recovered, reaching ₹1,077.86 crores by March 2025. This rebound indicates a partial recovery from the steep downturn experienced during the pandemic period.

Operating profit margins have mirrored this volatility. The company reported a positive operating profit margin of 16.56% in March 2019, but this turned negative in subsequent years, reaching a low of -26.68% in March 2023. By March 2025, the margin improved to 12.37%, signalling a return to operational profitability excluding other income. However, the gross profit margin has remained under pressure, reflecting ongoing cost challenges.

Despite improvements in operating profit, Coffee Day Enter has struggled with high interest expenses, which surged to ₹109.78 crores in March 2025 from ₹29.64 crores in March 2024. This increase has weighed heavily on profitability, contributing to persistent losses at the net profit level.

Profitability and Earnings Analysis

The company’s net profit figures reveal a challenging profitability landscape. After a strong profit of ₹1,883.53 crores in March 2020, Coffee Day Enter has reported losses in every subsequent year, with the consolidated net loss narrowing to ₹58.05 crores in March 2025 from a loss of ₹322.50 crores in March 2024. Earnings per share have followed a similar pattern, swinging from a positive ₹89.16 in March 2020 to a negative ₹2.75 in March 2025.

Profit before tax has also remained negative since March 2021, with a slight improvement to a loss of ₹6.18 crores in March 2025. Tax provisions have fluctuated, occasionally adding to the net loss due to deferred tax liabilities. Minority interest and share in profit of associates have had a marginal impact on the bottom line, with minority interest contributing positively in recent years.

Balance Sheet and Debt Position

On the balance sheet front, Coffee Day Enter’s shareholder funds have declined steadily from ₹4,303.54 crores in March 2020 to ₹2,590.46 crores in March 2025. The company’s total liabilities have also decreased from ₹9,287.01 crores in March 2020 to ₹4,641.23 crores in March 2025, reflecting efforts to deleverage.

However, total debt remains substantial at ₹1,125.25 crores as of March 2025, with a mix of long-term and short-term borrowings. The net block of fixed assets has shrunk significantly from ₹2,736.82 crores in March 2020 to ₹490.31 crores in March 2025, indicating asset sales or depreciation. Reserves have also been drawn down from ₹4,091.95 crores in March 2020 to ₹2,379.21 crores in March 2025, consistent with the company’s losses.

Cash Flow and Liquidity

Cash flow from operating activities has remained positive in recent years, reaching ₹195 crores in March 2025, which is a sign of improving core business cash generation. Investing activities have generally been cash outflows, reflecting ongoing capital expenditure and investments. Financing activities have been net outflows, consistent with debt repayments and deleveraging efforts.

Despite these efforts, the company’s closing cash and cash equivalents stood at ₹46 crores in March 2025, a modest increase from ₹35 crores in the previous year but still limited relative to its liabilities. Net cash inflow was positive at ₹11 crores in March 2025, indicating cautious but steady liquidity management.

Summary and Outlook

Coffee Day Enter’s historical performance reflects a company navigating significant operational and financial challenges. After a peak in revenues and profits in 2020, the company faced steep declines and losses, with gradual recovery in sales and operating profitability in recent years. Persistent high interest costs and net losses have weighed on shareholder returns, while balance sheet restructuring has reduced liabilities and improved liquidity modestly.

Investors should note the company’s improving operating margins and cash flow generation, which may signal stabilisation. However, the ongoing net losses and substantial debt levels suggest caution. The company’s ability to sustain revenue growth and manage costs will be critical for a turnaround in profitability and shareholder value.

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