How has been the historical performance of Incap?

Revenue and Operating Performance

For the fiscal year ending 31 March 2010, Incap reported total operating income of ₹13.66 crores, entirely derived from net sales, with no other operating income recorded. The company's cost structure was dominated by raw material expenses amounting to ₹9.99 crores, which constituted a significant portion of total expenditure. Manufacturing expenses and employee costs were ₹2.30 crores and ₹1.36 crores respectively, while power and selling expenses were negligible or absent.

The total expenditure excluding depreciation stood at ₹13.36 crores, resulting in a narrow operating profit before depreciation, interest, and tax (PBDIT) of ₹0.30 crores, excluding other income. Including other income of ₹0.50 crores, the operating profit improved to ₹0.81 crores. Despite this, interest expenses of ₹0.54 crores and depreciation of ₹0.67 crores weighed heavily on profitability.

Consequently, the company reported a gross profit before tax (PBDT) of ₹0.27 crores but incurred a loss before tax of ₹0.40 crores. After accounting for a tax credit of ₹0.26 crores, the net loss after tax was ₹0.66 crores. This translated into a negative earnings per share (EPS) of ₹-1.07, reflecting the company's struggle to generate positive net income during this period.

Profitability Margins and Shareholding

Incap's operating profit margin excluding other income was a modest 2.21%, while the gross profit margin was slightly lower at 1.95%. The net profit margin was negative at -4.84%, underscoring the company's inability to convert revenues into net earnings effectively. The public shareholding was nearly half at 49.12%, with no pledged promoter holdings, indicating a relatively balanced ownership structure without promoter encumbrances.

Cash Flow and Financial Health

Examining cash flow for the same period reveals a more nuanced picture. Despite the net loss, Incap generated positive cash flow from operating activities of ₹0.57 crores. Adjustments and changes in working capital contributed an additional ₹0.65 crores and ₹0.45 crores respectively, resulting in a cash flow after working capital changes of ₹0.82 crores.

However, investing activities reflected an outflow of ₹1.67 crores, likely related to capital expenditures or investments. Financing activities provided a significant inflow of ₹2.92 crores, which helped the company achieve a net cash inflow of ₹1.82 crores for the year. This improved the closing cash and cash equivalents to ₹2.37 crores from an opening balance of ₹0.55 crores, indicating a strengthening liquidity position despite operational losses.

Summary of Historical Performance

Overall, Incap's historical performance as of March 2010 reflects a company facing profitability challenges with limited operating margins and net losses. The revenue base was modest, and cost pressures from raw materials and depreciation impacted earnings. Nonetheless, the positive cash flow from operations and financing activities suggests some resilience in liquidity management. The absence of pledged promoter shares and a balanced public shareholding provide a stable ownership backdrop.

Investors analysing Incap's historical data should weigh the operational losses against the company's ability to maintain cash flows and liquidity. While the financials indicate a turnaround is necessary to achieve sustainable profitability, the cash flow trends and ownership structure offer some positive signals for potential recovery.

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