Revenue and Operating Performance
Over the four-year period, Laddu Gopal's net sales exhibited variability, with figures oscillating between approximately ₹35 crores and ₹45 crores. The total operating income closely mirrored net sales, indicating minimal contribution from other operating income sources. Notably, the fiscal year ending March 2015 saw a dip in sales to around ₹35 crores, followed by a rebound to nearly ₹45 crores in March 2016.
Operating profit before depreciation, interest, and tax (PBDIT) excluding other income showed a recovery from a substantial loss in March 2013 to positive territory in subsequent years. The operating profit margin improved from a negative 50.5% in 2013 to a positive 12.6% in 2015, before moderating to 6.4% in 2016. This indicates some operational stabilisation despite margin pressures.
However, depreciation expenses surged notably in 2016, impacting overall profitability. The company recorded a profit before tax of ₹1.16 crore in 2015 but swung to a loss of ₹14.31 crores in 2016, reflecting increased costs and depreciation charges. Correspondingly, the profit after tax followed this trend, with a significant loss in 2016 after modest profits and losses in prior years.
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Cost Structure and Margins
The company's cost structure saw notable fluctuations, particularly in raw material costs and other expenses. Raw material costs varied significantly, with a sharp increase in 2016 compared to 2015. Other expenses, which were exceptionally high in 2013, decreased substantially in subsequent years, contributing to improved operating results.
Power costs and manufacturing expenses also rose steadily, reflecting increased operational activity or cost pressures. Selling and distribution expenses nearly doubled from 2013 to 2016, indicating expanded marketing or distribution efforts. Despite these rising costs, the gross profit margin remained positive, though it declined from a peak in 2013 to more moderate levels in later years.
Balance Sheet and Financial Position
Laddu Gopal's balance sheet strengthened over the period, with shareholder's funds nearly doubling from ₹168 crores in 2015 to ₹300 crores in 2016. Reserves grew substantially, supporting the equity base. Total liabilities increased but remained manageable relative to assets, which expanded to ₹316 crores by 2016.
Long-term borrowings decreased from a high in 2014 but showed a slight uptick in 2016. Short-term borrowings were eliminated by 2014, improving liquidity risk. The company maintained a strong net current asset position, bolstered by significant inventory levels and current investments, which more than doubled from 2015 to 2016.
Book value per share rose markedly to over ₹265 in 2016, reflecting the enhanced net asset base despite recent profitability challenges.
Cash Flow Trends
Operating cash flow remained positive throughout, though it declined from a peak in 2013 to more modest levels in 2016. Investing activities consistently showed cash outflows, indicating ongoing capital expenditure or investment commitments. Financing cash flows fluctuated, with a notable outflow in 2015 followed by a small inflow in 2016, suggesting changes in debt or equity financing strategies.
Overall, net cash inflows were minimal in recent years, with closing cash and cash equivalents remaining low but stable.
Summary
Laddu Gopal's historical performance reflects a company navigating operational and financial challenges with mixed results. While revenue levels have been relatively stable, profitability has been volatile, impacted by rising costs and depreciation. The balance sheet shows signs of strengthening equity and controlled liabilities, supported by positive operating cash flows. Investors should weigh these factors carefully, considering both the company's recovery potential and the risks posed by recent losses.
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