Revenue and Profitability Trends
During the year ending March 2018, Patel Integrated reported net sales of ₹423.68 crores, marking a decline from ₹453.95 crores in the previous fiscal year. Despite this reduction in top-line revenue, the company managed to maintain a relatively steady operating profit margin. Operating profit before depreciation, interest, and tax (PBDIT) excluding other income stood at ₹17.32 crores in March 2018, slightly down from ₹18.04 crores a year earlier. However, the inclusion of other income, which increased to ₹5.29 crores from ₹4.78 crores, helped sustain the overall operating profit at ₹22.61 crores, nearly unchanged from ₹22.82 crores in the prior year.
Interest expenses decreased from ₹8.17 crores to ₹7.21 crores, contributing to an improved gross profit before depreciation and tax (PBDT) of ₹15.40 crores compared to ₹14.65 crores previously. Depreciation charges rose modestly to ₹4.76 crores from ₹4.22 crores. Consequently, profit before tax edged up to ₹10.64 crores from ₹10.44 crores, while profit after tax increased to ₹8.15 crores from ₹7.86 crores, reflecting a slight enhancement in net profitability. The profit after tax margin improved from 1.75% to 1.93%, indicating better cost control and operational efficiency despite the revenue dip.
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Cost Structure and Margins
The company’s total expenditure excluding depreciation decreased from ₹435.91 crores in March 2017 to ₹406.36 crores in March 2018. This reduction was primarily driven by lower manufacturing expenses, which fell from ₹383.18 crores to ₹356.27 crores, and a decline in other expenses from ₹24.75 crores to ₹21.60 crores. Employee costs saw a marginal increase to ₹28.49 crores from ₹27.98 crores. The operating profit margin excluding other income improved slightly to 4.1% from 4.01%, while the gross profit margin rose to 3.65% from 3.25%, signalling enhanced operational leverage despite the revenue contraction.
Balance Sheet and Financial Position
Patel Integrated’s balance sheet exhibited growth in shareholder’s funds, which increased to ₹127.35 crores from ₹115.26 crores, supported by a rise in reserves to ₹110.82 crores from ₹99.37 crores. Equity capital also grew modestly to ₹16.54 crores from ₹15.89 crores. Total liabilities expanded to ₹228.11 crores from ₹199.26 crores, reflecting increased borrowings and current liabilities. Long-term borrowings rose to ₹20.39 crores from ₹18.02 crores, with secured loans increasing notably to ₹10.83 crores from ₹6.36 crores, while unsecured loans decreased. Short-term borrowings remained relatively stable at ₹38.57 crores compared to ₹37.82 crores.
On the asset side, net block value increased to ₹53.48 crores from ₹47.73 crores, supported by capital work in progress rising to ₹4.03 crores from ₹1.79 crores. Non-current investments grew to ₹14.18 crores from ₹11.19 crores. Current assets expanded to ₹148.58 crores from ₹130.97 crores, driven by higher sundry debtors and other current assets. The company’s book value per share improved to ₹34.87 from ₹32.85, indicating enhanced net asset value per share.
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Cash Flow and Liquidity
Cash flow from operating activities declined significantly to ₹5 crores in March 2018 from ₹14 crores in the previous year, reflecting tighter working capital management. Changes in working capital were more adverse at -₹13 crores compared to -₹6 crores earlier, which impacted cash flow after working capital adjustments, reducing it to ₹4 crores from ₹10 crores. Investing activities continued to be cash outflows, though reduced to -₹11 crores from -₹18 crores, while financing activities generated a positive cash inflow of ₹3 crores compared to an outflow of ₹2 crores previously. Despite these movements, the company’s net cash position remained negative, with closing cash and cash equivalents at -₹23 crores, slightly lower than -₹21 crores a year earlier.
Summary
Overall, Patel Integrated’s historical performance over the two fiscal years demonstrates resilience amid a slight decline in revenue. The company has managed to improve profitability margins and strengthen its equity base while maintaining a stable debt profile. However, the contraction in operating cash flow and negative cash balances highlight areas requiring attention. Investors may find value in the company’s consistent profit generation and improving book value per share, balanced against the need for enhanced liquidity management.
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