How has been the historical performance of Guj. Terce Labs.?

Dec 04 2025 10:49 PM IST

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Guj. Terce Labs has experienced a decline in net sales and profitability over the past three years, culminating in a loss of -2.52 Cr in the most recent fiscal year, with significant decreases in revenue and operating profit. The company's financial metrics indicate ongoing challenges in generating cash from core operations.

Revenue and Profitability Trends

Over the three fiscal years ending March 2021, Guj. Terce Labs. witnessed a notable decline in net sales, falling from ₹37.54 crores in March 2020 to ₹25.18 crores in March 2021. This represents a significant contraction of approximately 33%, reversing the growth seen in the previous year when sales had increased from ₹31.03 crores in March 2019 to ₹37.54 crores in March 2020. The absence of other operating income throughout these years indicates that the company’s revenue streams are solely dependent on its core operations.

Cost management has been a mixed bag. Raw material costs and purchase of finished goods decreased in line with lower sales, but employee costs remained relatively high, only marginally reduced from ₹15.13 crores in 2020 to ₹12.97 crores in 2021. Other expenses also declined but still contributed to total expenditure exceeding operating income in the latest year. Consequently, the company reported an operating loss (PBDIT excluding other income) of ₹2.76 crores in March 2021, a sharp reversal from modest profits in the preceding years.

Interest expenses increased slightly to ₹0.39 crores in 2021, while depreciation remained stable. The net effect was a consolidated net loss after tax of ₹2.52 crores in March 2021, compared to profits of ₹0.28 crores and ₹0.43 crores in the two prior years. Earnings per share mirrored this trend, plunging to a negative ₹3.4 in 2021 from positive values in earlier years. Operating profit margins and PAT margins also turned negative, underscoring the profitability pressures faced by the company.

Balance Sheet and Financial Position

Examining the standalone balance sheet from March 2020 through March 2025 reveals a gradual erosion in shareholder funds, which declined from ₹11.11 crores in 2020 to ₹6.48 crores in 2025. This reduction reflects accumulated losses and reserve depletion. Total reserves turned negative in recent years, indicating retained losses impacting net worth.

The company’s total liabilities have remained relatively stable around ₹22-27 crores, with a notable reduction in total debt from ₹7.27 crores in 2023 to ₹0.94 crores in 2025. This deleveraging effort may improve financial flexibility, although short-term borrowings and provisions remain significant components of current liabilities.

Asset-wise, net block values have increased modestly, suggesting some capital investment, while current assets have fluctuated but stayed around ₹12 crores. However, net current assets have been negative in recent years, signalling working capital constraints. The book value per share has declined from ₹14.97 in 2020 to ₹8.26 in 2025, reflecting the impact of losses on equity value.

Cash Flow and Operational Efficiency

Cash flow data indicates a mixed picture. The company generated positive cash flow from operating activities in recent years, with ₹3 crores in 2025, improving from zero or negative cash flows in earlier years. Financing activities show net outflows in recent years, consistent with debt reduction efforts. Investing activities remained neutral, indicating no significant capital expenditure or asset sales.

Profit before tax has been volatile, with losses in 2021 and 2023 but a return to profitability in 2025. The company’s ability to generate positive operating cash flow despite recent losses suggests some operational resilience, though profitability remains a key challenge.

Summary and Outlook

In summary, Guj. Terce Labs. has faced a challenging period marked by declining sales, operating losses, and erosion of shareholder equity. While the company has taken steps to reduce debt and improve cash flow, profitability remains under pressure with negative margins and net losses in the latest reported year. The balance sheet shows signs of strain with negative reserves and working capital deficits, although recent deleveraging efforts may provide some financial stability.

Investors analysing Guj. Terce Labs. should weigh these historical performance trends carefully, considering the company’s operational challenges alongside its efforts to stabilise finances. The path to sustained profitability will likely require improved revenue growth and tighter cost control to reverse the recent downward trajectory.

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