Revenue and Operating Income Trends
Net sales for Malu Paper have demonstrated a generally upward trajectory from ₹169.74 crores in March 2021 to ₹277.89 crores in March 2025, reflecting a recovery and growth phase after a dip in 2021. The total operating income, which includes other operating income, followed a similar pattern, rising from ₹170.69 crores in 2021 to ₹278.44 crores in 2025. This growth indicates an expanding top line, supported by steady sales volumes and pricing strategies.
Raw material costs have increased in line with sales, reaching ₹185.93 crores in 2025 from ₹106.01 crores in 2021, signalling higher input costs or increased production scale. Employee costs have also risen moderately, reflecting possible workforce expansion or wage inflation. Other expenses, however, have fluctuated, peaking at ₹78.54 crores in 2024 before easing to ₹70.40 crores in 2025.
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Profitability and Margins
Malu Paper's operating profit (PBDIT) excluding other income has been volatile, with losses recorded in 2023 and 2025, contrasting with a peak of ₹23.49 crores in 2019. The operating profit margin has mirrored this trend, slipping into negative territory in recent years, with -0.13% in 2025 compared to a healthy 8.56% in 2019. This decline highlights margin pressures possibly due to rising costs and competitive challenges.
Interest expenses have steadily increased, reaching ₹11.42 crores in 2025, which has further weighed on profitability. Consequently, the company reported a profit before tax loss of ₹17.13 crores in 2025, a significant downturn from a profit of ₹10.08 crores in 2019. The net profit after tax has followed suit, with losses of ₹12.13 crores in 2025, reflecting ongoing operational and financial headwinds.
Balance Sheet and Financial Position
The company's shareholder funds have deteriorated sharply, turning negative at ₹-5.72 crores in 2025 from a positive ₹24.07 crores in 2021. This erosion is indicative of accumulated losses impacting net worth. Total liabilities have remained relatively stable around ₹156 crores in recent years, while total debt has increased from ₹93.26 crores in 2021 to ₹142.46 crores in 2025, signalling higher leverage and potential refinancing risks.
On the asset side, net block values have declined from ₹75.65 crores in 2021 to ₹67.24 crores in 2025, reflecting depreciation and limited capital expenditure. Current assets have increased modestly, but net current assets remain negative, highlighting working capital constraints. The book value per share has fallen from ₹14.11 in 2021 to a negative ₹3.35 in 2025, underscoring the financial strain on equity holders.
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Cash Flow and Operational Efficiency
Cash flow from operating activities has been inconsistent, with positive inflows of ₹3 crores in 2025 contrasting with negative cash flows in 2023. Adjustments and working capital changes have influenced these fluctuations, reflecting challenges in managing receivables, inventories, and payables efficiently. Investing activities have generally seen outflows, consistent with capital expenditure and asset maintenance, while financing activities have varied, including debt repayments and occasional borrowings.
Despite these challenges, the company has maintained a stable cash and bank balance around ₹2.66 crores in 2025, providing some liquidity cushion. However, the overall cash flow profile suggests the need for improved operational cash generation to support debt servicing and growth initiatives.
Outlook and Considerations
Malu Paper's historical performance reflects a company navigating through a period of growth in sales but facing significant profitability and balance sheet pressures. The rising debt levels and negative net worth raise concerns about financial stability, while margin compression points to competitive and cost challenges. Investors should weigh these factors carefully, considering the company's ability to improve operational efficiency and manage its leverage going forward.
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