Revenue and Operating Income Growth
Examining the consolidated annual results, Suryalak. Cott. has seen its net sales surge from ₹229.09 crores in March 2007 to ₹691.41 crores by March 2012. This represents a threefold increase over five years, underscoring the company’s ability to scale its core business. Total operating income, which includes other operating income, followed a similar upward trend, rising from ₹229.09 crores in 2007 to ₹701.34 crores in 2012. This growth reflects both increased sales volumes and diversification of income streams.
Cost Structure and Profitability Margins
Raw material costs, the largest expense component, increased substantially from ₹166.23 crores in 2007 to ₹424.46 crores in 2012, in line with the revenue growth. Employee costs and power costs also rose, with employee expenses tripling from ₹12.51 crores to ₹37.87 crores, and power costs emerging as a significant expense by 2012 at ₹53.98 crores, whereas it was negligible in 2007. Manufacturing expenses doubled over the period, indicating increased production activity.
Despite rising costs, the company maintained a healthy operating profit (PBDIT) excluding other income, which grew from ₹21.61 crores in 2007 to ₹95.51 crores in 2012. However, operating profit margins declined from 15.84% in 2011 to 13.62% in 2012, suggesting some pressure on profitability possibly due to cost inflation or pricing challenges.
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Profitability and Earnings Trends
The company’s profit before tax (PBT) showed a marked improvement from a marginal ₹1.15 crores in 2007 to ₹38.56 crores in 2012, although it experienced a dip from ₹51.56 crores in 2011. Profit after tax (PAT) followed a similar pattern, moving from a loss of ₹0.11 crores in 2007 to a positive ₹28.76 crores in 2012, but down from ₹35.48 crores the previous year. This indicates some volatility in net earnings, possibly influenced by interest costs and depreciation, which also increased over the years.
Earnings per share (EPS) improved significantly from a negative ₹0.08 in 2007 to ₹19.65 in 2012, reflecting the company’s turnaround in profitability and enhanced shareholder value. The PAT margin, however, remained modest at 4.1% in 2012, down from 5.64% in 2011, signalling room for margin expansion.
Cash Flow and Financial Health
Cash flow from operating activities has strengthened considerably, rising from ₹24.35 crores in 2011 to ₹84.99 crores in 2012, indicating improved cash generation capacity. The company’s net cash inflow/outflow showed a slight negative movement in 2012 at -₹3.66 crores, compared to a positive ₹7.62 crores in 2011, largely due to significant cash outflows in investing activities, which surged to -₹118.59 crores in 2012. This suggests ongoing capital expenditure or strategic investments aimed at future growth.
Closing cash and cash equivalents stood at ₹6.16 crores in 2012, down from ₹9.83 crores in 2011, reflecting the cash utilisation in investing activities. The company’s equity capital increased modestly from ₹13.36 crores in 2007 to ₹14.52 crores in 2012, while reserves grew substantially to ₹162.57 crores, indicating retained earnings accumulation and strengthening of the balance sheet.
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Summary of Historical Performance
Overall, Suryalak. Cott. has exhibited robust growth in sales and operating income over the past five years, supported by increased production capacity and operational scale. Profitability has improved from losses in 2007 to consistent profits by 2012, although margins have faced some pressure in recent years. The company’s cash flow position remains healthy, with strong operating cash generation offsetting heavy investing outflows. The steady rise in reserves and equity capital further reflects a strengthening financial foundation.
Investors analysing Suryalak. Cott.’s historical performance should note the company’s ability to expand revenue and earnings despite cost pressures, alongside its ongoing investments for future growth. While profitability margins have contracted slightly, the overall trend points to a company that has successfully transitioned from loss-making to profitable operations with a solid cash flow profile.
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