Revenue and Profitability Trends
Manugraph India’s net sales have shown significant volatility over the past seven years. The company recorded its highest revenue in the fiscal year ending March 2017, with net sales nearing ₹286 crores. However, this figure declined sharply in subsequent years, falling to approximately ₹79.6 crores by March 2023. The steepest drop occurred between 2019 and 2021, where sales plummeted from over ₹251 crores to under ₹30 crores, reflecting considerable operational challenges.
Operating profit margins have consistently been negative during this period, with the margin excluding other income deteriorating from a marginal -0.21% in 2017 to a substantial -18.88% in 2023. The company’s operating profit (PBDIT) also remained in the red, with losses narrowing slightly in recent years but still significant at around -₹13.3 crores in 2023. Other income provided some relief but was insufficient to offset operational deficits.
Profit after tax has been negative throughout, with losses peaking in 2020 at nearly -₹35 crores. Earnings per share (EPS) followed a similar pattern, reflecting sustained negative returns for shareholders. The PAT margin worsened from a negligible -0.36% in 2017 to -13.51% in 2023, underscoring ongoing profitability pressures.
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Cost Structure and Expenditure
The company’s cost of raw materials has generally tracked revenue trends but remained a substantial portion of total expenditure, reaching nearly ₹67 crores in 2023. Employee costs have decreased from over ₹60 crores in 2017 to under ₹23 crores in 2023, reflecting possible workforce optimisation. Other expenses have fluctuated, with a notable increase in recent years, contributing to the overall expenditure exceeding revenue consistently.
Total expenditure excluding depreciation has consistently surpassed total operating income, resulting in operating losses. Interest expenses have risen moderately, reaching ₹2.72 crores in 2023, while exceptional items have varied, sometimes providing one-off gains or losses that impacted gross profit.
Balance Sheet and Financial Position
Manugraph India’s shareholder funds have declined from ₹208 crores in 2018 to approximately ₹99 crores in 2023, reflecting accumulated losses and reserve depletion. The company has maintained a consistent equity capital base of ₹6.08 crores throughout the period. Notably, the company has no long-term borrowings, but short-term borrowings increased to ₹10.45 crores in 2023, indicating reliance on short-term financing.
Total liabilities have decreased from over ₹306 crores in 2018 to around ₹172 crores in 2023, signalling some deleveraging or asset reduction. Net block of fixed assets has also declined gradually, suggesting limited capital expenditure or asset sales. Deferred tax assets have remained stable, providing some tax relief potential.
Cash Flow Analysis
Cash flows from operating activities have been negative for most years, with a slight improvement in 2022 when it reached a neutral position. Investing activities have generated positive cash inflows, particularly in recent years, possibly from asset disposals or investment maturities. Financing activities have generally resulted in cash outflows, reflecting debt repayments or dividend payments. Overall, the company’s closing cash and cash equivalents have diminished from ₹12 crores in 2019 to just ₹1 crore in 2023, highlighting liquidity constraints.
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Summary of Historical Performance
In summary, Manugraph India has faced a prolonged period of financial stress characterised by declining revenues, persistent operating losses, and negative net profits. Despite efforts to control costs and reduce liabilities, the company has yet to return to profitability. Its balance sheet shows a shrinking equity base and increased short-term borrowings, while cash reserves have dwindled, raising concerns about liquidity. The company’s earnings per share have remained negative, reflecting the ongoing challenges in generating shareholder value.
Investors analysing Manugraph India should consider these historical trends alongside sectoral dynamics and market conditions. While the company’s asset base remains substantial, the consistent losses and cash flow deficits suggest a need for strategic turnaround initiatives to restore financial health and operational efficiency.
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