How has been the historical performance of Simplex Infra?

Revenue and Profit Trends

Examining Simplex Infra's net sales from fiscal year ending March 2019 through March 2025, there is a clear downward trajectory. The company recorded net sales exceeding ₹6,000 crores in 2019, which steadily declined to just over ₹1,000 crores by 2025. This sharp reduction indicates a significant contraction in business scale or project execution over the period.

Operating profit margins, excluding other income, have also been under pressure. While the margin was a robust 11.6% in 2019, it dropped to around 2.1% by 2025. The operating profit itself saw a steep fall from over ₹700 crores in 2019 to under ₹25 crores in 2025, signalling tighter operational efficiency or pricing pressures.

Profit after tax (PAT) figures further illustrate the company's struggles. After posting a positive PAT of ₹121 crores in 2019, Simplex Infra experienced consecutive years of losses, with the nadir occurring between 2021 and 2024. The fiscal year ending March 2025 marked a return to modest profitability, with a PAT of approximately ₹11.6 crores, suggesting early signs of recovery.

Balance Sheet and Debt Position

Simplex Infra's balance sheet reflects significant leverage challenges. Total liabilities remained elevated, peaking near ₹9,500 crores in the 2019 to 2024 period before reducing to approximately ₹3,776 crores in 2025. This reduction was largely driven by a sharp decline in short-term borrowings, which fell from over ₹7,000 crores in 2024 to just ₹561 crores in 2025.

Long-term borrowings, however, increased substantially in 2025 to over ₹1,600 crores, indicating a restructuring of debt from short-term to long-term obligations. Shareholders’ funds have also fluctuated, dropping from ₹1,766 crores in 2020 to a low of ₹232 crores in 2024, before recovering to ₹524 crores in 2025. This recovery is a positive sign but still reflects a capital base significantly below earlier levels.

Book value per share has mirrored these trends, declining from over ₹300 in 2020 to around ₹78 in 2025, underscoring the erosion of net asset value over the years.

On the asset side, net block values have decreased steadily, reflecting asset depreciation and possibly asset sales or impairments. Current assets also contracted sharply, with cash and bank balances improving modestly in 2025 to ₹118 crores from ₹61 crores the previous year.

Cash Flow and Operational Performance

Cash flow from operating activities has been volatile, with negative cash flows recorded in most years between 2019 and 2024. The fiscal year ending March 2025 marked a turnaround with positive operating cash flow of ₹207 crores, indicating improved operational cash generation. Investing activities have generally been modest, with a slight outflow in 2025.

Financing activities have seen significant fluctuations, with large inflows in some years and outflows in others, reflecting ongoing debt management and capital raising efforts. The net cash inflow in 2025 was ₹56 crores, a positive development after several years of net outflows.

Outlook and Investor Considerations

Simplex Infra’s historical performance highlights a period of significant financial stress, marked by declining revenues, persistent losses, and high leverage. The recent fiscal year shows signs of stabilisation with improved profitability and cash flow, alongside a restructured debt profile. However, the company’s margins remain thin and the balance sheet still carries considerable debt.

Investors should weigh these factors carefully, considering the company’s efforts to regain financial health against the backdrop of a challenging industry environment. The modest return to profitability and improved cash flow in 2025 may signal a turning point, but sustained recovery will depend on execution and market conditions.

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