How has been the historical performance of Nureca?

Revenue and Operating Performance Trends

Over the six-year period ending March 2025, Nureca's net sales exhibited notable volatility. The company recorded a peak revenue of ₹255.55 crores in March 2022, followed by a sharp decline to ₹109.66 crores in March 2025. This fluctuation reflects a challenging market environment or strategic shifts impacting sales volumes and pricing. Total operating income mirrored this pattern, with no other operating income reported during the period.

Cost management has been a mixed bag. Raw material costs, introduced in recent years, rose to ₹11.29 crores by March 2025, while purchases of finished goods remained the largest expenditure, peaking at ₹159.55 crores in March 2022 before falling to ₹63.68 crores in March 2025. The company also experienced swings in stock levels, with inventory changes contributing positively or negatively to costs in different years.

Employee costs have steadily increased, reaching ₹15.31 crores in the latest fiscal year, indicating possible expansion or wage inflation. Other expenses remained substantial, peaking at ₹57.51 crores in March 2022 and moderating to ₹33.88 crores by March 2025. Despite these efforts, total expenditure excluding depreciation consistently exceeded operating income in recent years, leading to operating losses before other income.

Profitability and Margins

Nureca's operating profit before depreciation and interest (PBDIT) excluding other income swung from a positive ₹61.53 crores in March 2021 to a negative ₹7.54 crores in March 2025. Including other income, operating profit turned positive again in the latest year but remained marginal at ₹4.90 crores. Interest expenses have been relatively low, though slightly rising to ₹1.21 crores in March 2025.

Profit before tax followed a similar pattern, peaking at ₹62.33 crores in March 2021 before plunging into losses in the subsequent two years and recovering to a modest ₹1.34 crores in March 2025. After tax, the company reported a profit of ₹0.85 crores in the latest year, contrasting with losses in the two preceding years and strong profits in 2021 and 2022.

Margins have reflected these swings. Operating profit margins excluding other income were robust at 28.83% in March 2021 but turned negative in recent years, reaching -6.88% in March 2025. Gross profit margins followed a similar trajectory, while the profit after tax margin dropped from over 21% in 2021 to under 1% in 2025.

Balance Sheet and Financial Position

On the balance sheet front, shareholder's funds have grown steadily from ₹14.93 crores in March 2020 to ₹194.28 crores in March 2025, supported by reserves increasing to ₹184.29 crores. The company’s equity capital remained stable at ₹10 crores since March 2021. Total liabilities have also increased but remain manageable relative to assets, which stood at ₹206.50 crores in March 2025.

Debt levels have significantly reduced from ₹9.78 crores in March 2020 to virtually nil by March 2025, indicating a strong deleveraging trend. Long-term borrowings are minimal, and current liabilities have remained relatively stable. The company’s net block of fixed assets has increased steadily, reflecting ongoing capital investment.

Current assets have remained robust, with cash and bank balances consistently high, although showing some decline from ₹126.69 crores in March 2021 to ₹46.25 crores in March 2025. Inventories and short-term loans and advances have increased, suggesting operational scaling or stockpiling strategies.

Cash Flow and Liquidity

Cash flow from operations has been inconsistent, with negative cash flow reported in the latest fiscal year at ₹-19 crores, contrasting with positive inflows in earlier years. Investing activities have fluctuated, with significant outflows in 2021 followed by inflows in 2024 and 2025. Financing activities have generally been modest, with a notable inflow in 2021 linked to capital raising or debt management.

Net cash inflows and outflows have varied, with a net outflow of ₹10 crores in March 2025 after a positive inflow in the previous year. Opening and closing cash balances have also fluctuated, reflecting the company's operational and investment cycles.

Overall, Nureca's historical performance depicts a company that experienced strong growth and profitability up to 2021, followed by a period of contraction and losses, with signs of stabilisation in the latest fiscal year. Investors should weigh these dynamics carefully, considering both the recovery potential and the challenges reflected in recent financials.

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