How has been the historical performance of Novelix Pharma.?

Revenue and Operating Performance Trends

Net sales for Novelix Pharma. peaked around the fiscal year ending March 2018 at approximately ₹10.50 crores but have since shown a gradual decline, falling to ₹8.61 crores by March 2022. The total operating income mirrored this trend, with a notable drop from ₹10.50 crores in 2018 to ₹8.61 crores in 2022. The company’s cost structure reveals a significant reliance on the purchase of finished goods, which constituted the largest share of expenditure, increasing from ₹4.12 crores in 2016 to ₹8.26 crores in 2022. Raw material costs remained relatively low but fluctuated, while employee costs showed a modest increase over the years.

Operating profit margins have deteriorated sharply, with the company reporting negative margins consistently since 2018. The operating profit (PBDIT) excluding other income swung from a positive ₹0.27 crores in 2017 to a negative ₹2.57 crores in 2022. Despite some other income contributions, the overall operating profit remained negative, indicating operational challenges.

Profitability and Earnings Analysis

Profit before tax has been negative for most years since 2018, with losses widening to ₹2.12 crores in 2022 from a marginal profit of ₹0.19 crores in 2017. Correspondingly, the company’s net profit after tax has been in the red since 2018, culminating in a consolidated net loss of ₹1.80 crores in 2022. Earnings per share (EPS) have reflected this downturn, declining from a positive 0.12 in 2016 to a negative ₹2.22 in 2022. The profit after tax margin has also deteriorated, standing at -23.58% in 2022 compared to a positive 2.27% in 2016, underscoring the company’s struggle to generate sustainable profits.

Balance Sheet and Asset Quality

Shareholder funds have contracted significantly from ₹11.54 crores in 2017 to ₹7.40 crores in 2022, reflecting accumulated losses and negative reserves. The company has maintained a debt-free status throughout the period, which is a positive aspect amid operational challenges. Total assets have decreased from ₹13.75 crores in 2017 to ₹8.67 crores in 2022, with net block assets declining from ₹2.10 crores to ₹0.47 crores, indicating limited capital investment or asset disposals. Non-current investments have increased notably in recent years, suggesting a strategic shift or diversification in asset allocation.

Cash Flow and Liquidity Position

Cash flow from operating activities has been positive in the last two years, standing at ₹1.00 crore in both 2021 and 2022, which may indicate improved working capital management despite ongoing losses. The company has not reported any cash flow from investing or financing activities in recent years, maintaining a stable cash and bank balance that increased to ₹2.89 crores in 2022 from ₹0.59 crores in 2017. This liquidity position provides some cushion for the company as it navigates its financial challenges.

Summary and Outlook

Overall, Novelix Pharma. has faced a challenging period marked by declining revenues, persistent operating losses, and erosion of shareholder equity. While the absence of debt is a positive factor, the company’s profitability metrics and asset base have weakened over the years. The recent modest improvement in operating cash flow and stable liquidity position may offer some operational flexibility. However, the company will need to address its core profitability issues and revenue decline to restore investor confidence and achieve sustainable growth.

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