Revenue and Operating Income Trends
Over the twelve-year span from March 2008 to March 2020, Singer India’s net sales exhibited a significant upward trajectory. Starting from ₹49.55 crores in 2008, net sales surged to ₹451.18 crores by 2020, marking a near ninefold increase. The total operating income mirrored this growth, rising from ₹49.55 crores in 2008 to ₹451.18 crores in 2020, reflecting the company’s expanding market presence and sales volume.
However, the period between 2018 and 2020 saw a slight dip in net sales, from ₹482.99 crores in 2019 to ₹451.18 crores in 2020, indicating some short-term challenges or market adjustments. Despite this, the company maintained a consistent operating profit margin, hovering around 3.1% to 3.3% in recent years, which suggests effective cost management amid fluctuating revenues.
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Profitability and Expense Analysis
Profit after tax (PAT) has shown a decline from the highs of earlier years, with ₹27.32 crores reported in 2008 dropping to ₹7.98 crores in 2020. This decline is partly attributable to increased expenditure and interest costs. For instance, total expenditure excluding depreciation rose from ₹47.78 crores in 2008 to ₹436.52 crores in 2020, reflecting the scale of operations but also rising costs.
Interest expenses increased from ₹1.11 crores in 2008 to ₹2.18 crores in 2020, which may have impacted net profitability. Despite these pressures, the company maintained a positive operating profit (PBDIT) of ₹18.31 crores in 2020, up from ₹2.68 crores in 2008, indicating operational resilience.
Margins have contracted over time, with PAT margin decreasing from 1.09% in 2008 to 1.77% in 2020, and operating profit margin remaining relatively stable around 3.2% in recent years. Earnings per share (EPS) also reflect this trend, with a decline from 6.91 in 2008 to 1.49 in 2020, influenced by changes in equity capital and face value adjustments.
Cash Flow and Financial Stability
Cash flow from operating activities has been volatile, with positive inflows of ₹17 crores in 2020 contrasting with negative cash flows in prior years such as 2018 and 2019. The company’s net cash inflow was ₹9 crores in 2020, a recovery from outflows in previous years. However, closing cash and cash equivalents remained negative at ₹-10 crores in 2020, indicating liquidity challenges that may require attention.
Investing activities consistently showed modest outflows, while financing activities reflected repayments or reductions in borrowings, with ₹-6 crores in 2020. These cash flow patterns suggest a cautious approach to capital management amid operational pressures.
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Summary of Historical Performance
In summary, Singer India has experienced substantial growth in revenue over the past decade, expanding its scale of operations significantly. Profitability has been maintained but with some erosion in margins and net profit, reflecting increased costs and interest expenses. The company’s cash flow position has improved recently but remains an area to monitor closely due to negative cash equivalents.
Overall, Singer India’s historical performance reveals a company that has grown steadily but faces challenges in sustaining profitability and liquidity. Investors should consider these factors alongside market conditions and sector dynamics when evaluating the company’s prospects.
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