How has been the historical performance of Nila Spaces?

Revenue and Operating Performance Trends

Over the seven-year period, Nila Spaces’ net sales have demonstrated considerable variability. Starting from a modest ₹9.48 crores in March 2019, sales surged to ₹87.65 crores by March 2020, only to decline sharply to ₹1.01 crore in March 2023. However, the company rebounded strongly in the latest fiscal years, with net sales reaching ₹135.80 crores in March 2025, representing a substantial recovery and growth trajectory.

This erratic revenue pattern is mirrored in the operating profit margins. The operating profit margin excluding other income improved markedly to 24.4% in March 2025 from a low of negative 779.2% in March 2023. The gross profit margin also stabilised, registering 18.9% in the latest fiscal year after a steep negative margin in 2023. These figures indicate a return to operational efficiency and better cost management after a period of losses.

Raw material costs have fluctuated in line with sales, peaking at ₹191.07 crores in March 2025, which is higher than the total operating income, suggesting inventory adjustments and stock changes have played a significant role in cost dynamics. The company recorded a large negative change in stocks in the latest year, which positively impacted the total expenditure and operating profit.

Profitability and Earnings Analysis

Nila Spaces’ profitability has been inconsistent, with profit after tax (PAT) swinging from losses to gains. The company posted a consolidated net loss in fiscal years 2021 to 2023, with the lowest PAT of negative ₹4.06 crores in March 2023. However, the latest fiscal year saw a return to profitability with a consolidated net profit of ₹14.73 crores in March 2025, improving from ₹13.42 crores in the previous year.

Earnings per share (EPS) followed a similar pattern, turning positive again at ₹0.37 in March 2025 after negative EPS in 2023. The PAT margin also recovered to 10.8% in the latest year, reflecting improved bottom-line performance. Interest expenses increased significantly to ₹16.08 crores in March 2025, which may reflect higher borrowings or refinancing costs, yet the company managed to sustain positive gross and net profits.

Balance Sheet and Financial Position

The company’s balance sheet expanded notably, with total assets rising from ₹143.08 crores in March 2020 to ₹311.12 crores in March 2025. Shareholders’ funds increased steadily to ₹142.28 crores, supported by reserves growth to ₹102.89 crores. The book value per share improved to ₹3.61 in March 2025, indicating enhanced net asset value per share.

Debt levels have fluctuated, with total debt rising to ₹21.60 crores in March 2025 from negligible levels in prior years. Long-term borrowings increased sharply, suggesting the company has taken on more secured loans recently. Current liabilities also surged to ₹152.26 crores, reflecting increased short-term obligations. Despite this, net current assets remained positive at ₹128.40 crores, signalling adequate short-term liquidity.

Cash Flow and Liquidity

Cash flow from operating activities turned negative at ₹-40 crores in March 2025, contrasting with positive inflows in previous years. This was largely due to significant changes in working capital, which saw a ₹71 crore outflow. Investing activities generated positive cash flow of ₹30 crores, while financing activities contributed ₹5 crores, resulting in a net cash outflow of ₹4 crores for the year. The closing cash and cash equivalents stood at ₹9 crores, down from ₹13 crores the previous year, indicating a tighter liquidity position.

Summary and Outlook

In summary, Nila Spaces has experienced a turbulent financial journey characterised by sharp swings in revenue and profitability. The recent fiscal years show a promising recovery with strong sales growth, improved operating margins, and a return to net profitability. The company’s balance sheet has expanded with increased borrowings and liabilities, but it maintains positive net current assets and a rising book value per share.

Investors should note the volatility in earnings and cash flows, alongside rising interest costs and working capital demands. While the latest results indicate operational improvements and financial stabilisation, ongoing monitoring of debt levels and liquidity will be crucial to assess the sustainability of this recovery.

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