How has been the historical performance of Spel Semiconduct?

Revenue and Operating Income Trends

Spel Semiconduct's net sales have experienced a notable decline from ₹90.78 crores in March 2011 to ₹35.66 crores by March 2017. This downward trend reflects a contraction of over 60% in top-line revenue during this period. Other operating income remained minimal, contributing marginally to total operating income, which similarly fell from ₹91.46 crores in 2011 to ₹35.67 crores in 2017.

The contraction in revenue was accompanied by a reduction in raw material costs, which decreased from ₹43.62 crores in 2011 to ₹12.70 crores in 2017, consistent with the lower sales volume. Employee costs remained relatively stable, fluctuating between ₹16.19 crores and ₹13.35 crores, indicating limited cost flexibility in labour expenses. Manufacturing expenses also declined but at a slower pace, from ₹13.27 crores to ₹10.54 crores over the same timeframe.

Profitability and Margins

Operating profit before depreciation and interest (PBDIT) excluding other income showed a sharp decline, turning negative in the last two years. From a healthy ₹16.70 crores in 2011, it dropped to a loss of ₹1.29 crores in 2017. Including other income, operating profit (PBDIT) also followed this downward trend, registering a marginal profit of ₹0.64 crores in 2017 compared to ₹18.30 crores in 2011.

Interest expenses increased from ₹1.73 crores in 2011 to ₹2.67 crores in 2017, adding pressure on profitability. Depreciation charges rose steadily, reaching ₹7.11 crores in 2017 from ₹8.84 crores in 2011, further impacting earnings before tax. Consequently, profit before tax swung from a positive ₹7.74 crores in 2011 to a loss of ₹8.44 crores in 2017.

Net profit after tax mirrored this trend, with the company posting losses in recent years. The consolidated net profit fell from ₹4.52 crores in 2011 to a loss of ₹8.82 crores in 2017. Earnings per share (EPS) followed suit, declining from ₹0.98 in 2011 to a negative ₹1.91 in 2017. Operating profit margins excluding other income deteriorated from a robust 18.26% in 2011 to a negative 3.61% in 2017, while PAT margins plunged from 4.95% to -24.71% over the same period.

Cash Flow and Financial Stability

Cash flow from operating activities showed a declining pattern, with ₹18.23 crores generated in 2012 falling to ₹5.81 crores in 2015, and no reported cash flow data for 2016 and 2017. Investing activities fluctuated, with significant outflows in 2012 but modest inflows in subsequent years. Financing activities consistently reflected outflows, indicating repayments or reductions in borrowings.

Net cash inflows/outflows were negative in most years, with a slight improvement in 2015. Closing cash and cash equivalents declined sharply from ₹2.55 crores in 2012 to ₹0.08 crores in 2015, with no available data for later years, suggesting tightening liquidity.

Summary and Outlook

Overall, Spel Semiconduct has faced significant headwinds over the past seven years, with declining revenues and persistent losses impacting its financial stability. The company’s operating and net profit margins have deteriorated markedly, reflecting challenges in cost management and market conditions. Despite some periods of positive cash flow from operations, liquidity appears constrained in recent years.

Investors analysing Spel Semiconduct should weigh these historical trends carefully, considering the company’s ability to stabilise revenues and improve profitability in a competitive semiconductor sector. The consistent decline in earnings and cash reserves highlights the need for strategic initiatives to restore growth and financial health.

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