Revenue and Operating Performance Trends
Examining Meyer Apparel's net sales from March 2019 through March 2025, the company experienced a significant decline in turnover. Starting from ₹8.59 crores in March 2019, sales dropped sharply to ₹1.20 crores by March 2025. This downward trajectory was not linear; the company saw fluctuations with intermittent recoveries, such as a rise to ₹6.30 crores in March 2023, but the overall trend remained negative. Other operating income remained nil throughout this period, indicating reliance solely on core sales for revenue generation.
Operating profit margins have consistently been in the red, with the operating profit before depreciation and interest (PBDIT) excluding other income showing losses every year. The margin worsened to nearly -93.3% in the latest fiscal year ending March 2025, compared to -21.3% in March 2019. Even after accounting for other income, operating profits remained negative, underscoring the company's inability to control costs relative to revenues.
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Cost Structure and Profitability Challenges
The company's expenditure profile reveals persistent challenges. Raw material costs and purchase of finished goods have fluctuated but remained substantial relative to sales. For instance, raw material costs were ₹4.81 crores in March 2019 but dropped to zero in March 2025, reflecting the steep decline in operations. Employee costs and other expenses have also been significant, with employee costs reducing from ₹4.10 crores in 2019 to ₹0.42 crores in 2025, mirroring the scale-down in business activities.
Despite these cost reductions, Meyer Apparel has not achieved profitability. Profit after tax (PAT) has been negative every year, with losses peaking at ₹7.49 crores in March 2020 and narrowing to ₹1.07 crores in March 2025. Earnings per share have remained negative throughout, indicating no return to shareholders. The PAT margin has consistently been deeply negative, reaching nearly -89.2% in the latest fiscal year.
Balance Sheet and Financial Position
Meyer Apparel's balance sheet reflects a deteriorating financial position. Shareholders' funds have been negative since at least March 2019, worsening from -₹25.60 crores in 2020 to -₹32.78 crores in 2025. This negative net worth signals accumulated losses exceeding equity capital and reserves, which themselves have been deeply negative and increasing in deficit over the years.
The company has maintained zero long-term and short-term borrowings, indicating no reliance on external debt financing. However, current liabilities remain substantial, around ₹33 crores in March 2025, far exceeding current assets of just ₹0.60 crores, resulting in a negative net current asset position. This imbalance highlights liquidity pressures and potential challenges in meeting short-term obligations.
Cash Flow and Asset Base
Cash flow data indicates limited operational cash generation, with cash flow from operating activities being zero or negative in recent years. The company’s net block of fixed assets has steadily declined from ₹0.88 crores in 2020 to a mere ₹0.06 crores in 2025, reflecting asset disposals or depreciation without significant reinvestment. Non-current assets have similarly diminished, underscoring a shrinking asset base.
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Summary and Outlook
Over the past six years, Meyer Apparel has faced a persistent decline in sales and profitability, with operating losses and negative margins throughout. The company’s financial health is strained, as evidenced by negative net worth and liquidity challenges. Despite cost-cutting efforts, the firm has not returned to profitability, and its asset base has contracted significantly.
Investors should note the ongoing financial difficulties and consider the company's position carefully in the context of sector dynamics and peer performance. The absence of debt may provide some financial flexibility, but the negative equity and cash flow constraints present significant hurdles for recovery.
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