How has been the historical performance of Nivaka Fashions?

Revenue and Profit Trends

Examining the company’s net sales reveals a sharp contraction from ₹36.24 crores in March 2019 to just ₹1.47 crores in March 2025. This represents a decline of nearly 96% over six years, indicating substantial erosion in the company’s top line. Total operating income, which includes other operating income, followed a similar trajectory, falling from ₹36.24 crores in 2019 to ₹1.84 crores in 2025.

Operating profit before other income (PBDIT) has been volatile, with a peak of ₹2.45 crores in 2019, turning negative in 2020 and 2021, and recovering modestly to ₹0.22 crores in 2025. The company’s profit before tax and profit after tax have mirrored this pattern, with positive earnings in 2019 and 2021 but losses in recent years, including a loss after tax of ₹0.50 crores in 2025.

Margins have also been under pressure. The operating profit margin excluding other income was 4.88% in 2019 but swung to negative territory in 2020 and 2021 before improving to 14.97% in 2025. However, the profit after tax margin remains negative at -34.01% in 2025, reflecting ongoing profitability challenges.

Cost Structure and Expenses

The company’s expenditure profile shows that purchase of finished goods has drastically reduced from ₹33.11 crores in 2019 to ₹0.05 crores in 2025, consistent with the decline in sales. Employee costs have remained relatively stable, fluctuating around ₹0.61 to ₹1.19 crores over the years, indicating a lean workforce despite shrinking operations. Other expenses have varied but remain a significant component of total expenditure, which has fallen from ₹34.47 crores in 2019 to ₹1.62 crores in 2025.

Depreciation charges have increased slightly in recent years, reaching ₹0.51 crores in 2025, which impacts the net profitability. Interest expenses have remained low but steady, around ₹0.20 crores in the latest years, reflecting modest borrowing levels.

Balance Sheet and Asset Quality

Nivaka Fashions’ total assets have contracted sharply from ₹34.04 crores in 2021 to ₹13.83 crores in 2025, mirroring the decline in business scale. Shareholders’ funds have also decreased from ₹10.04 crores in 2021 to ₹9.59 crores in 2025, with reserves turning negative in recent years, indicating accumulated losses.

The company’s debt levels have remained relatively low, with total borrowings around ₹0.65 crores in 2025. Current liabilities have reduced significantly from ₹23.52 crores in 2021 to ₹2.48 crores in 2025, suggesting a downsizing of operational commitments. Net current assets have improved to ₹3.14 crores in 2025 from negative territory in earlier years, which may indicate better short-term liquidity management.

Cash Flow and Liquidity

Cash flow data shows limited activity in recent years, with operating cash flow turning positive in 2023 but negative changes in working capital in 2022. Investing activities have fluctuated, with a notable outflow in 2023. The company’s cash and bank balances remain minimal, reflecting tight liquidity conditions. Overall, the cash flow position suggests cautious financial management amid challenging business conditions.

Summary and Outlook

In summary, Nivaka Fashions has faced a prolonged period of financial contraction, with sales and profitability declining sharply since 2019. While the company has managed to reduce costs and improve certain liquidity metrics, it continues to report losses and negative reserves. The modest operating profit margins in recent years have not translated into net profitability, and the company’s asset base has shrunk considerably.

Investors should weigh these historical performance trends carefully, considering the company’s challenges in regaining scale and profitability. The financial data suggests that while there may be some operational improvements, significant hurdles remain for Nivaka Fashions to restore its earlier growth trajectory and financial health.

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