How has been the historical performance of Infomedia Press?

Revenue and Profitability Overview

In the fiscal year ending March 2007, Infomedia Press reported total operating income of ₹188.67 crores, entirely derived from net sales, as other operating income was negligible. The company’s cost structure included raw material expenses of ₹31.14 crores and manufacturing expenses amounting to ₹75.50 crores, alongside employee costs of ₹53.69 crores. These expenditures contributed to a total operating expenditure (excluding depreciation) of ₹163.75 crores.

Operating profit before other income stood at ₹24.92 crores, which improved to ₹31.67 crores after accounting for ₹6.75 crores in other income. Interest expenses were recorded at ₹4.71 crores, and depreciation at ₹9.04 crores, resulting in a profit before tax of ₹17.92 crores. After tax deductions of ₹3.99 crores, the company posted a consolidated net profit of ₹13.92 crores for that year.

Profit margins reflected a healthy operating profit margin of 13.21% (excluding other income) and a gross profit margin of 14.29%. The profit after tax margin was 7.38%, indicating moderate profitability relative to sales. Earnings per share (EPS) were ₹4.79, with diluted EPS at ₹6.59, based on an equity capital of ₹19.69 crores and reserves of ₹80.68 crores.

Cash Flow and Financial Health Trends

Examining cash flow data from March 2007 through March 2011 reveals a challenging period for Infomedia Press. In March 2007, the company generated a positive cash flow from operating activities of ₹11.53 crores, supported by a profit before tax of ₹20.93 crores. However, this positive trend reversed in subsequent years, with operating cash flows turning negative from March 2008 onwards, reaching a low of -₹27.04 crores by March 2011.

Investing activities also fluctuated significantly, with a substantial outflow of ₹49.71 crores in March 2007, followed by variable inflows and outflows in later years. Financing activities showed a similar pattern, with a net outflow of ₹29.03 crores in 2007, but a positive inflow of ₹42.88 crores in 2010 before declining again.

Net cash inflows and outflows reflect this volatility, with a steep negative net cash flow of -₹67.21 crores in 2007, improving to a positive ₹19.88 crores in 2010, then declining once more to -₹11.55 crores in 2011. The closing cash and cash equivalents also fluctuated, starting at ₹20.28 crores in 2007, peaking at ₹35.16 crores in 2008, and falling to ₹14.22 crores by 2011.

Summary of Historical Performance

Overall, Infomedia Press exhibited solid revenue and profitability in the fiscal year 2007, with commendable operating and net profit margins. However, the subsequent years saw a decline in profitability and cash flow generation, indicating operational and financial challenges. The company’s ability to manage working capital and investing activities has been inconsistent, impacting its liquidity position.

While the early period reflected a stable earnings profile with reasonable EPS and reserves, the negative profit before tax figures from 2008 onwards highlight the need for strategic turnaround measures. Investors should weigh these historical fluctuations carefully, considering both the company’s past strengths and recent financial headwinds.

Investor Considerations

Given the historical data, Infomedia Press’s performance underscores the importance of monitoring cash flow trends alongside profitability metrics. The company’s initial strong margins and earnings per share were offset by subsequent years of losses and cash outflows, which may affect investor confidence and valuation.

Potential investors should consider the company’s ability to stabilise operations and improve cash generation in the near term. The absence of public shareholding and pledged promoter holdings as of 2007 suggests a concentrated ownership structure, which could influence governance and strategic decisions.

In conclusion, while Infomedia Press showed promise in its earlier financial years, the mixed results in later periods call for cautious analysis. Investors are advised to assess the company’s current fundamentals and market position before making investment decisions.

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