How has been the historical performance of SPL Industries?

Dec 03 2025 10:51 PM IST

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SPL Industries experienced a significant decline in net sales and profitability from 2009 to 2011, with net sales dropping from 369.07 Cr to 158.37 Cr and operating profit turning negative, resulting in increased losses before and after tax. Overall, the company's financial performance deteriorated markedly during this period.

Revenue and Operating Income Trends

Over the three-year period, SPL Industries’ net sales witnessed a significant contraction, falling from ₹369.07 crores in March 2009 to ₹158.37 crores by March 2011. This decline of over 57% reflects a substantial reduction in the company’s top-line performance. Other operating income remained relatively stable but negligible in comparison, contributing less than ₹1 crore annually. Consequently, total operating income mirrored the sales trend, dropping from ₹369.76 crores in 2009 to ₹158.99 crores in 2011.

Raw material costs and manufacturing expenses also decreased in line with the reduced scale of operations, with raw material costs falling from ₹177.69 crores in 2009 to ₹69.74 crores in 2011, and manufacturing expenses declining from ₹142.96 crores to ₹71.72 crores over the same period. However, the company’s inventory levels showed an unusual pattern, with an increase in stocks of approximately ₹52 crores in both 2010 and 2011, contrasting with a decrease in 2009. Employee costs similarly reduced but remained a significant expense, dropping from ₹38.68 crores in 2009 to ₹18.88 crores in 2011.

Profitability and Margins

The company’s operating profit before depreciation, interest, and tax (PBDIT) declined sharply, moving from a positive ₹35.58 crores in 2009 to a negative ₹53.69 crores in 2011. This deterioration was accompanied by a worsening operating profit margin, which shifted from a positive 9.62% in 2009 to a negative 33.77% in 2011. Gross profit margins followed a similar trajectory, plunging from -1.88% in 2009 to -39.47% in 2011, indicating increasing cost pressures relative to revenue.

Interest expenses decreased modestly from ₹14.77 crores in 2009 to ₹9.63 crores in 2011, but exceptional items fluctuated, with a negative impact of ₹27.76 crores in 2009 turning into a positive ₹0.57 crores in 2011. Despite these adjustments, the company’s profit before tax remained deeply negative, worsening from a loss of ₹15.24 crores in 2009 to ₹68.54 crores in 2011. Correspondingly, the net profit after tax reflected sustained losses, increasing from ₹14.31 crores in 2009 to ₹70.09 crores in 2011, with the profit after tax margin declining from -3.87% to -44.09%.

Earnings per share (EPS) also mirrored this negative trend, falling from -₹4.94 in 2009 to -₹24.17 in 2011, underscoring the company’s ongoing challenges in generating shareholder value.

Cash Flow and Financial Position

Cash flow data from March 2007 to March 2010 reveals a mixed picture. Operating cash flow improved from ₹2.06 crores in 2007 to ₹12.23 crores in 2010, reflecting some operational cash generation despite losses. However, investing activities showed significant variability, with a net inflow of ₹20.65 crores in 2010 contrasting with outflows in prior years. Financing activities consistently resulted in cash outflows, notably ₹34.78 crores in 2010, indicating repayments or reductions in borrowings.

Net cash inflow/outflow figures highlight volatility, with a net outflow of ₹1.90 crores in 2010 following a modest inflow in 2009. The company’s cash and cash equivalents declined from ₹32.01 crores in 2007 to ₹4.24 crores in 2010, signalling tightening liquidity over time.

Summary and Outlook

In summary, SPL Industries has faced a pronounced decline in financial performance over the analysed period. The company’s revenues have contracted sharply, accompanied by escalating losses and deteriorating margins. Despite some improvement in operating cash flows, liquidity has tightened, and net losses have deepened substantially. The absence of positive earnings and the negative trend in profitability metrics suggest that SPL Industries has been grappling with operational and market challenges that have yet to be resolved.

Investors should carefully consider these historical trends alongside current market conditions and company developments before making investment decisions. The persistent losses and shrinking reserves highlight the need for strategic turnaround initiatives to restore financial health and shareholder confidence.

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