Revenue and Profitability Trends
Decillion Financ's net sales have experienced variability, peaking at ₹2.96 crores in March 2018 before declining to ₹1.67 crores by March 2019. Total operating income mirrored this trend, reaching nearly ₹3 crores in 2018 but retreating to under ₹2 crores the following year. Despite these fluctuations, the company maintained positive operating profits, with operating profit before depreciation and interest (PBDIT) rising to ₹0.22 crores in 2019 from a modest ₹0.10 crores in 2018.
Operating profit margins excluding other income showed a recovery in 2019 to 5.45%, rebounding from negative margins in the two preceding years. Gross profit margins also improved to 9.53% in 2019, indicating better cost control or pricing power. Profit after tax (PAT) margins, however, have been inconsistent, peaking at 14.87% in 2016 but falling to 7.01% in 2019, reflecting the challenges in sustaining profitability amid revenue volatility.
Consolidated net profit followed a similar pattern, with ₹0.14 crores reported in 2019, up from ₹0.08 crores in 2018 but still below the ₹0.14 crores seen in 2016. Earnings per share (EPS) fluctuated accordingly, reaching 0.41 in 2019 after a dip to 0.22 in 2018.
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Cost Structure and Expenses
The company’s expenditure profile reveals that purchase of finished goods constitutes the largest cost component, accounting for ₹1.20 crores in 2019, down from ₹3.12 crores in 2018. Employee costs remained relatively stable, around ₹0.10 crores in 2019, while manufacturing expenses increased slightly to ₹0.16 crores. Notably, there were no raw material costs or selling and distribution expenses reported, suggesting a business model focused on trading or financial services rather than manufacturing.
Interest expenses rose marginally to ₹0.06 crores in 2019, reflecting some borrowing activity, although the company reported no long-term borrowings during the period. Total expenditure excluding depreciation was ₹1.58 crores in 2019, a significant reduction from ₹3.06 crores in 2018, aligning with the decline in operating income.
Balance Sheet Stability
Decillion Financ’s balance sheet demonstrates consistent shareholder equity, with shareholders’ funds hovering around ₹11 crores from 2015 to 2019. The equity capital remained unchanged at ₹3.50 crores, with reserves gradually increasing to ₹7.93 crores by 2019. The company maintained a low debt profile, with total debt rising slightly to ₹0.34 crores in 2019 from zero in prior years, indicating cautious leverage.
Assets remained stable, with total assets around ₹11.75 crores in 2019, slightly down from ₹12.52 crores in 2018. Non-current investments fluctuated, decreasing to ₹3.75 crores in 2019 from ₹5.28 crores in 2015, while current assets increased notably to ₹3.83 crores in 2019, largely due to current investments. The book value per share showed a steady increase, reaching ₹32.65 in 2019, reflecting incremental value creation for shareholders.
Cash Flow and Liquidity
Cash flow analysis reveals challenges in operating cash generation, with cash flow from operating activities negative in several years, including a significant outflow in 2016. However, 2018 saw a positive operating cash flow of ₹0.11 crores. Investing activities showed mixed results, with a notable inflow of ₹3.30 crores in 2016 but outflows in subsequent years. Financing activities contributed positively in 2018 with ₹0.81 crores, likely supporting liquidity needs.
Despite these fluctuations, the company maintained a reasonable cash and bank balance, closing at ₹0.04 crores in 2019. The net cash inflow/outflow was negative ₹1 crore in 2019, indicating some liquidity pressure compared to positive inflows in previous years.
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Summary and Outlook
Over the five-year period analysed, Decillion Financ has demonstrated resilience amid fluctuating revenues and profitability. The company’s ability to maintain positive net profits and improve operating margins in 2019 suggests operational adjustments have been effective. Its conservative capital structure with minimal debt and steady shareholder equity provides a solid foundation for future growth.
However, the variability in sales and cash flow indicates potential volatility in business conditions or market demand. Investors should consider these factors alongside the company’s improving profitability metrics and stable balance sheet when evaluating Decillion Financ’s prospects.
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