How has been the historical performance of Galaxy Agrico?

Revenue and Operating Performance

Galaxy Agrico's net sales have exhibited modest variation, ranging from ₹4.84 crores in March 2015 to ₹5.85 crores in March 2018. The total operating income, which includes other operating income, peaked at ₹5.91 crores in March 2016 before settling at ₹5.85 crores in March 2018. This stability in top-line figures suggests a consistent demand for the company's products within the fertilisers sector, despite minor year-on-year fluctuations.

Operating profit before depreciation, interest, and tax (PBDIT) excluding other income showed a notable peak in March 2016 at ₹1.54 crores, reflecting an operating margin of 26.01%. However, this margin contracted to 10.8% by March 2018, with PBDIT at ₹0.63 crores. The decline in operating profitability over this period indicates rising costs or pricing pressures, although the company maintained positive operating earnings throughout.

Raw material costs and manufacturing expenses have been significant components of total expenditure, with raw material costs decreasing sharply from ₹1.44 crores in March 2014 to ₹0.33 crores in March 2018, while manufacturing expenses increased from ₹2.17 crores to ₹3.24 crores over the same period. Employee costs also rose, more than doubling from ₹0.60 crores in March 2017 to ₹1.17 crores in March 2018, which may reflect strategic investments in human resources.

Profitability and Margins

Profit before tax (PBT) has been volatile, with losses recorded in March 2015 and March 2017 at ₹-1.38 crores and ₹-0.10 crores respectively. The company returned to profitability in March 2016 and March 2018, posting PBT of ₹0.31 crores and ₹0.14 crores. Correspondingly, profit after tax (PAT) followed a similar pattern, with a significant loss of ₹-1.00 crore in March 2015, a peak profit of ₹0.42 crores in March 2016, and a modest profit of ₹0.20 crores in March 2018.

Margins have mirrored these trends. The PAT margin improved from a negative 20.46% in March 2015 to a positive 3.45% in March 2018. Earnings per share (EPS) also reflect this recovery, moving from a loss of ₹-3.66 per share in March 2015 to a gain of ₹0.74 per share in March 2018. Despite these improvements, the company’s profitability remains modest relative to its peak in 2016.

Interest expenses have steadily declined from ₹0.41 crores in March 2014 to ₹0.03 crores in March 2018, indicating reduced reliance on debt financing. Depreciation charges have fluctuated, peaking at ₹1.76 crores in March 2015 before falling to ₹0.47 crores in March 2018, reflecting changes in asset utilisation and capital expenditure.

Balance Sheet and Financial Position

Galaxy Agrico’s total assets have contracted from ₹9.20 crores in March 2014 to ₹5.44 crores in March 2018, signalling a leaner asset base. Net block, representing fixed assets net of depreciation, declined from ₹6.22 crores to ₹2.68 crores over the same period. This reduction may indicate asset sales or lower capital investment.

Shareholders’ funds have remained relatively stable, increasing slightly from ₹4.04 crores in March 2015 to ₹4.68 crores in March 2018. The company has successfully reduced its total debt from ₹2.59 crores in March 2014 to zero by March 2018, eliminating long-term and short-term borrowings. This deleveraging strengthens the balance sheet and reduces financial risk.

Current assets have remained steady around ₹2.5 crores, with cash and bank balances improving from ₹0.16 crores in March 2014 to ₹0.48 crores in March 2018. Net current assets have also increased, supporting operational liquidity. Deferred tax assets have decreased from ₹0.80 crores to ₹0.13 crores, reflecting changes in tax positions.

Cash Flow and Operational Efficiency

Cash flow from operating activities has shown a positive trend, rising from ₹0.69 crores in March 2014 to ₹1.29 crores in March 2018. This improvement highlights better cash generation from core business operations. Cash flow after changes in working capital also increased, indicating effective management of receivables, inventories, and payables.

Investing activities have generally resulted in modest outflows, with ₹-0.39 crores in March 2018, suggesting some capital expenditure or investment in assets. Financing activities have consistently been cash outflows, reflecting debt repayments and possibly dividend payments, with ₹-0.68 crores in March 2018.

Overall, the company’s net cash inflow was positive at ₹0.21 crores in March 2018, improving from negative or near-zero levels in prior years. Closing cash and cash equivalents increased to ₹0.34 crores, supporting liquidity and operational flexibility.

Summary

Galaxy Agrico’s historical performance over the five-year period demonstrates a company that has stabilised its revenues and improved profitability after periods of losses. The reduction in debt and strengthening of cash flows are positive indicators of financial health. However, operating margins have contracted from their peak, and asset base reduction suggests a cautious capital expenditure approach. Investors should weigh these factors alongside sector dynamics when considering Galaxy Agrico’s prospects.

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