How has been the historical performance of Paramount Cosmet?

Revenue and Operating Performance Trends

Examining Paramount Cosmet's net sales from fiscal year ending March 2019 through March 2025, the company experienced notable volatility. Sales peaked at ₹26.72 crores in March 2023, following a dip to ₹17.50 crores in March 2021. The latest figures for March 2025 show net sales at ₹20.38 crores, reflecting a moderate decline from the previous year’s ₹21.81 crores. This fluctuation suggests sensitivity to market conditions or operational factors impacting top-line growth.

Operating profit margins excluding other income have mirrored this variability. The margin was robust at 20.13% in March 2019 but declined sharply to negative territory in March 2022 at -4.61%. However, a recovery is evident with a margin of 4.81% in March 2025, signalling improved operational efficiency despite ongoing challenges. The operating profit (PBDIT) excluding other income also reflects this pattern, with a low point in March 2022 and a rebound to ₹0.98 crores in the latest fiscal year.

Profitability and Earnings Analysis

Profit before tax has remained modest, ranging from ₹0.07 crores in March 2025 to a peak of ₹0.51 crores in March 2019. Profit after tax (PAT) has been particularly volatile, with losses recorded in fiscal years ending March 2019 and March 2020, followed by a recovery to ₹0.34 crores in March 2021. The latest PAT stands at ₹0.03 crores, indicating a marginal profit but a positive direction compared to earlier losses.

Earnings per share (EPS) have followed a similar trajectory, with negative values in 2019 and 2020, improving to 0.7 in March 2021, and settling at 0.06 in March 2025. The PAT margin, while low at 0.15% in the latest year, marks an improvement from negative margins in prior years, reflecting the company's efforts to stabilise profitability.

Balance Sheet and Financial Position

Paramount Cosmet's shareholder funds have shown steady growth, rising from ₹19.37 crores in March 2020 to ₹20.37 crores in March 2025. The company’s total liabilities have decreased from ₹48.75 crores in March 2020 to ₹40.04 crores in March 2025, indicating a gradual reduction in financial leverage. Long-term borrowings have notably declined from ₹5.67 crores in March 2020 to ₹2.73 crores in March 2025, while short-term borrowings remain significant at ₹8.66 crores.

On the asset side, total assets have contracted from ₹48.75 crores in March 2020 to ₹40.04 crores in March 2025, with a reduction in non-current assets and a rise in current assets, particularly inventories which increased to ₹21.24 crores in the latest year. The book value per share has remained relatively stable, inching up from ₹39.89 in March 2020 to ₹41.95 in March 2025, underscoring consistent net asset value per share.

Cash Flow and Operational Efficiency

Cash flow data available for recent years shows modest operating cash inflows, with ₹3 crores generated in March 2023 and ₹2 crores in March 2021. Investing activities have seen occasional inflows, notably ₹4 crores in March 2022, while financing activities consistently reflect outflows, indicating debt repayments or capital restructuring efforts. The net cash position remains stable with no significant inflows or outflows recorded in recent years.

Overall, Paramount Cosmet's historical performance depicts a company navigating through operational challenges and market fluctuations, with signs of recovery in profitability and a cautious approach to managing liabilities. Investors should weigh these trends alongside sector dynamics and company-specific strategies when considering exposure to this microcap entity.

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