How has been the historical performance of Nagpur Power?

Revenue and Profitability Trends

Over the past seven years, Nagpur Power’s net sales have shown a generally upward trend, rising from ₹41.00 crores in March 2019 to ₹62.18 crores in March 2025. This growth reflects the company’s expanding operational scale and market presence. However, the journey has not been without challenges; the company experienced a dip in sales in 2020 and 2021, likely influenced by broader economic conditions.

Operating profit excluding other income has been volatile, with losses recorded in 2020, 2022, and 2023. Notably, the operating profit margin excluding other income swung from a negative 14.24% in 2020 to a positive 4.73% in 2025, indicating a recovery in operational efficiency. Other income has played a crucial role in cushioning earnings, contributing significantly to the operating profit in several years, including ₹5.20 crores in 2025.

Profit after tax (PAT) has mirrored this volatility, with losses in 2020, 2023, and 2024, but a return to profitability in 2022 and 2025. The PAT margin improved to 4.42% in 2025 from a negative margin in the previous year, signalling a positive turnaround. Earnings per share (EPS) followed a similar pattern, recovering to ₹2.10 in 2025 after negative values in preceding years.

Cost Structure and Expenditure

The company’s cost of raw materials has fluctuated, peaking at ₹26.39 crores in 2025 from ₹21.74 crores in 2019, reflecting increased input costs or volume. Employee costs have also risen steadily, reaching ₹20.16 crores in 2025, which may indicate workforce expansion or wage inflation. Other expenses have increased from ₹7.97 crores in 2019 to ₹13.01 crores in 2025, contributing to the overall expenditure growth.

Total expenditure excluding depreciation rose from ₹39.34 crores in 2019 to ₹59.24 crores in 2025, consistent with the company’s revenue growth but also highlighting margin pressures. Despite this, the company managed to improve its gross profit margin to 9.2% in 2025, up from 5.17% in 2019, signalling better cost control or pricing power.

Balance Sheet and Financial Position

Nagpur Power’s total assets have grown steadily from ₹95.01 crores in 2020 to ₹124.42 crores in 2025, supported by increases in both non-current and current assets. The net block of fixed assets rose significantly, indicating ongoing capital investments. Shareholders’ funds have also increased, reaching ₹84.96 crores in 2025, reflecting accumulated reserves and retained earnings.

Liabilities have expanded, with total debt rising from ₹11.07 crores in 2020 to ₹17.13 crores in 2025. The company’s short-term borrowings constitute the majority of this debt, suggesting reliance on working capital financing. Contingent liabilities have decreased notably from ₹24.75 crores in 2021 to ₹4.31 crores in 2025, which may reduce potential off-balance-sheet risks.

Cash Flow Analysis

Cash flow from operating activities has been inconsistent, with negative cash flows of ₹9.00 crores in 2025 and ₹3.00 crores in 2024, contrasting with positive flows in earlier years. This volatility reflects changes in working capital and operational challenges. Investing activities have been relatively stable, with minor inflows and outflows, while financing activities have provided positive cash inflows, particularly ₹8.00 crores in 2025, likely supporting the company’s capital and working capital needs.

Summary of Historical Performance

In summary, Nagpur Power has experienced a mixed financial performance over the last several years. The company has successfully increased its revenue base and improved profitability in recent periods after enduring losses. Its balance sheet shows growth in assets and equity, though accompanied by rising debt levels. Cash flow management remains an area requiring attention due to negative operating cash flows in recent years. Investors should weigh these factors carefully, considering the company’s recovery potential alongside its operational and financial risks.

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