How has been the historical performance of Palred Technolog?

Dec 02 2025 10:52 PM IST

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Palred Technolog has experienced a significant decline in financial performance, with net sales dropping from 148.02 Cr in Mar'23 to 85.67 Cr in Mar'25, and operating profit turning negative, resulting in increasing losses over the years. Total liabilities and assets also decreased during this period, while cash flow from operations remained negative.

Revenue and Profitability Trends

Palred Technolog's net sales demonstrated a notable rise from ₹33.94 crores in March 2019 to a peak of ₹148.02 crores in March 2023, reflecting a period of robust top-line growth. However, this upward trajectory reversed in the subsequent years, with sales declining to ₹115.99 crores in March 2024 and further to ₹85.67 crores by March 2025. The absence of other operating income throughout this period indicates the company's reliance solely on core business revenues.

Despite the revenue growth until 2023, the company struggled to maintain consistent profitability. Operating profit before other income (PBDIT excl. OI) turned positive only in 2021 and 2023, reaching ₹5.09 crores and ₹2.37 crores respectively, but slipped back into negative territory in 2024 and 2025. The operating profit margin mirrored this volatility, peaking at 4.35% in 2021 before declining to -6.84% in 2025.

Interest expenses increased steadily from a modest ₹0.09 crores in 2019 to ₹5.63 crores in 2025, exerting pressure on earnings. Consequently, profit before tax remained negative for most years except 2021, with a loss of ₹8.62 crores recorded in 2025. The net profit followed a similar pattern, with a positive ₹2.51 crores in 2021 but losses widening to ₹7.76 crores by 2025. Earnings per share reflected these trends, swinging from a loss of ₹10.59 in 2019 to a brief profit in 2021, then back to a loss of ₹6.35 in 2025.

Cost Structure and Expenditure

The company's cost of goods sold and operating expenses have shown considerable variation. Raw material costs appeared only from 2023 onwards, reaching ₹40.20 crores in 2025. Purchase of finished goods remained a significant expense, peaking at ₹113.87 crores in 2023 before falling to ₹11.00 crores in 2025. Employee costs increased steadily, reflecting workforce expansion or wage inflation, rising from ₹7.30 crores in 2019 to ₹9.73 crores in 2025. Other expenses remained substantial, fluctuating around ₹20-28 crores annually.

Total expenditure excluding depreciation closely tracked revenue movements, peaking at ₹145.65 crores in 2023 and declining to ₹91.53 crores in 2025. This cost volatility contributed to the inconsistent profitability margins observed.

Balance Sheet and Financial Position

Palred Technolog's total assets grew from ₹48.18 crores in 2020 to a high of ₹130.19 crores in 2023, before contracting to ₹115.55 crores in 2025. The company maintained a relatively low net block of fixed assets, around ₹1.13 crores in 2025, indicating limited capital intensity. Non-current assets, including long-term loans and advances, increased moderately over the years.

Current assets, dominated by cash and bank balances, inventories, and sundry debtors, rose significantly, with cash reserves reaching ₹55.83 crores in 2025. However, total liabilities also increased, with current liabilities standing at ₹67.18 crores in 2025. Notably, short-term borrowings surged from ₹12.09 crores in 2020 to ₹55.88 crores in 2025, reflecting increased reliance on short-term debt financing. Shareholders' funds expanded from ₹26.99 crores in 2020 to ₹48.41 crores in 2025, though book value per share declined from ₹48.86 in 2023 to ₹39.58 in 2025, signalling some erosion in net asset value.

Cash Flow Dynamics

Operating cash flows have been persistently negative, with cash flow from operating activities recording losses of ₹13-18 crores in several years, including ₹2 crores in 2024. Investing activities mostly involved outflows, particularly a ₹24 crore outflow in 2023, while financing activities provided intermittent inflows, notably ₹43 crores in 2023. Despite these movements, net cash inflows remained flat or negative, indicating tight liquidity conditions.

Summary and Investor Considerations

Palred Technolog's historical performance reflects a company that experienced rapid revenue growth followed by a sharp decline in recent years. Profitability has been inconsistent, with losses prevailing in most fiscal years except for a brief recovery in 2021. The rising interest burden and fluctuating cost structure have weighed heavily on earnings. The balance sheet shows increased leverage through short-term borrowings, while cash flow challenges persist due to negative operating cash flows and significant investing outlays.

Investors analysing Palred Technolog should weigh the company's growth potential against its profitability struggles and financial leverage. The decline in book value per share and persistent losses suggest caution, while the sizeable cash reserves may provide some operational flexibility. Overall, the company's financial history underscores the importance of closely monitoring future revenue trends, cost management, and debt levels before making investment decisions.

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