Revenue and Profitability Trends
Inter Globe Fin’s net sales have shown a significant upward trajectory over the years, rising from ₹6.79 crores in March 2011 to ₹78.50 crores by March 2017. This represents a more than tenfold increase in top-line revenue over six years, reflecting the company’s expanding operations and market presence. However, it is notable that the revenue peaked at ₹92.00 crores in March 2016 before moderating slightly in the following year.
Operating profit (PBDIT) excluding other income has fluctuated during this period. While it was robust at ₹6.06 crores in 2011, it declined sharply in subsequent years, reaching a low of ₹0.64 crores in 2016 before recovering to ₹2.32 crores in 2017. This volatility suggests operational challenges or changing cost structures impacting earnings before interest and taxes.
Profit after tax (PAT) has mirrored this pattern, with ₹0.45 crores in 2011, dipping to ₹0.27 crores in 2016, and rebounding to ₹1.56 crores in 2017. The PAT margin, however, remains modest at 1.99% in 2017 compared to a high of 6.61% in 2011, indicating tighter profitability despite revenue growth.
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Cost Structure and Margins
The company’s expenditure profile reveals that purchase of finished goods constitutes the largest cost component, amounting to ₹68.82 crores in 2017, down from ₹95.83 crores in 2016. Other costs such as employee expenses and manufacturing overheads have increased moderately, with employee costs rising from ₹0.60 crores in 2016 to ₹0.94 crores in 2017, and manufacturing expenses nearly doubling to ₹3.44 crores in 2017.
Operating profit margins excluding other income have improved to 2.96% in 2017 from a low of 0.69% in 2016, though still below the 3.25% recorded in 2012. Gross profit margin also saw a recovery to 3.6% in 2017, indicating some operational efficiency gains despite the competitive pressures.
Balance Sheet and Financial Position
Inter Globe Fin’s balance sheet reflects a stable financial position with shareholder’s funds increasing marginally to ₹94.03 crores in 2017 from ₹92.81 crores in 2016. The company maintains a debt-free status, with no long-term or short-term borrowings reported in the last two years, underscoring a conservative capital structure.
Non-current investments have grown substantially from ₹2.93 crores in 2016 to ₹12.89 crores in 2017, suggesting strategic deployment of surplus funds. Meanwhile, current liabilities have increased to ₹8.93 crores in 2017 from ₹1.92 crores in 2016, which may warrant monitoring for working capital management.
Book value per share stood at ₹131.1 in 2017, slightly lower than ₹136.03 in 2016, reflecting stable net asset value per share despite fluctuations in earnings.
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Cash Flow and Liquidity
Cash flow from operating activities showed a marked improvement in 2017, generating ₹10.87 crores compared to a negative cash flow of ₹0.19 crores in 2016. This turnaround was driven by positive changes in working capital, which contributed ₹8.60 crores in 2017 versus a negative ₹0.80 crores the previous year.
Investing activities, however, resulted in a cash outflow of ₹10.48 crores in 2017, significantly higher than ₹2.65 crores in 2016, likely reflecting increased investments in non-current assets. Financing activities remained modestly negative, with outflows of ₹0.60 crores in 2017.
Overall, the company experienced a slight net cash outflow of ₹0.21 crores in 2017, an improvement from a larger outflow of ₹3.20 crores in 2016. Closing cash and cash equivalents stood at ₹0.62 crores in 2017, down from ₹0.83 crores the prior year, indicating a relatively stable liquidity position.
Summary
Inter Globe Fin’s historical performance reveals a company that has expanded its revenue base substantially over the past decade while navigating fluctuations in profitability and operational efficiency. The absence of debt and a growing reserve base provide a solid foundation, though margins remain modest and warrant close attention. Improved cash flow from operations in recent years is a positive sign, balanced against increased investing outflows. Investors should weigh these factors carefully when considering the company’s prospects in the competitive NBFC sector.
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