How has been the historical performance of Restile Ceramics?

Revenue and Operating Income Trends

Over the past seven years, Restile Ceramics’ net sales have demonstrated significant volatility. The company recorded its highest sales in the fiscal year ending March 2020, with ₹2.08 crore, followed closely by ₹2.06 crore in March 2019. However, sales declined sharply in subsequent years, hitting a low of ₹0.59 crore in March 2022 before partially recovering to ₹1.43 crore by March 2025. Other operating income has consistently remained nil throughout this period, indicating reliance solely on core sales for revenue generation.

Total operating income mirrored the sales trend, reflecting the company’s dependence on its primary business activities without supplementary income streams. The fluctuating sales figures suggest challenges in market demand or operational capacity, impacting the company’s top line.

Cost Structure and Profitability

Restile Ceramics’ cost of raw materials and purchase of finished goods have generally tracked the revenue pattern, with purchase of finished goods constituting the largest expense component. For instance, in March 2025, purchases accounted for ₹1.29 crore against total operating income of ₹1.43 crore, highlighting a high cost base relative to sales. Employee costs have remained relatively stable, averaging around ₹0.3 crore annually, while other expenses have shown a downward trend from ₹0.98 crore in March 2019 to ₹0.31 crore in March 2025.

Despite efforts to manage costs, the company has consistently reported negative operating profits (PBDIT), excluding other income, with margins ranging from -40.56% in March 2025 to a low of -98.31% in March 2022. Even after accounting for other income, operating profits remained negative, underscoring ongoing operational challenges.

Profitability and Earnings

The company has not reported any interest expenses, which suggests an absence of interest-bearing debt, yet it has consistently posted losses before tax. Profit before tax has ranged from a loss of ₹5.91 crore in March 2019 to a loss of ₹0.96 crore in March 2025, indicating some improvement but still reflecting unprofitable operations. Correspondingly, earnings per share have remained negative throughout, with a slight improvement from -₹0.60 in March 2019 to -₹0.10 in March 2025.

Operating profit margins and PAT margins have been deeply negative, with the latter showing extreme losses in earlier years, such as -1025.42% in March 2022, before moderating to -67.13% in March 2025. These figures highlight the company’s struggle to achieve profitability despite efforts to control costs.

Balance Sheet and Financial Position

Restile Ceramics’ balance sheet reveals a concerning financial position. Shareholder’s funds have been negative consistently, deteriorating from -₹16.38 crore in March 2020 to -₹31.67 crore in March 2025. This negative net worth reflects accumulated losses and erosion of reserves, which stood at -₹129.95 crore as of March 2025.

The company carries no long-term borrowings but has substantial short-term borrowings, remaining steady around ₹38 crore over the years. Total liabilities have decreased from ₹24.26 crore in March 2020 to ₹6.75 crore in March 2025, indicating some deleveraging or asset reduction.

On the asset side, net block values have declined significantly from ₹18.89 crore in March 2020 to ₹5.48 crore in March 2025, reflecting depreciation and possibly asset sales or impairments. Current assets have also shrunk, with inventories reducing from ₹2.34 crore in March 2020 to ₹0.66 crore in March 2025, and cash and bank balances remaining low but stable around ₹0.57 crore.

Cash Flow Overview

Cash flow data indicates limited operational cash generation, with a positive cash flow from operating activities of ₹1 crore in March 2025, contrasting with negative or zero cash flows in prior years. Investing activities have been minimal, and financing activities show a small outflow in the latest year, suggesting restrained capital expenditure and financing movements.

Summary and Outlook

In summary, Restile Ceramics has faced persistent financial difficulties characterised by fluctuating revenues, sustained losses, and a weakened balance sheet. Despite some improvement in sales and operating losses in recent years, the company continues to operate at a loss with negative shareholder equity and limited cash reserves. The absence of interest expenses suggests no debt servicing burden, yet the high level of short-term borrowings and negative net worth pose significant challenges.

Investors should carefully consider these factors when evaluating Restile Ceramics, as the company’s historical performance reflects ongoing operational and financial headwinds. While recent trends show marginal improvement, the path to sustained profitability and balance sheet repair remains uncertain.

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