Revenue and Operating Performance Trends
Tarai Foods’ net sales have shown a significant downward trend since the fiscal year ending March 2020. The company recorded net sales of ₹3.00 crores in March 2020, which gradually declined to ₹0.47 crores by March 2023, before falling to zero in the subsequent two years. This steep reduction in sales revenue highlights considerable operational challenges faced by the company in recent times.
Correspondingly, total operating income mirrored this decline, dropping from ₹3.00 crores in March 2020 to ₹0.47 crores in March 2023, and then to nil in the latest two fiscal years. The absence of other operating income throughout this period further emphasises the company’s limited revenue streams.
On the expenditure front, raw material costs decreased in line with sales, from ₹1.08 crores in March 2020 to ₹0.14 crores in March 2023, and then to zero thereafter. Employee costs also followed a downward trajectory, falling from ₹0.43 crores in March 2020 to ₹0.08 crores in March 2025. Power costs and other expenses similarly declined, reflecting the reduced scale of operations.
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Profitability and Margins
Operating profit before depreciation and interest (PBDIT) excluding other income has consistently been negative, with losses widening from ₹0.04 crores in March 2020 to ₹0.31 crores in March 2025. Even after accounting for other income, the company has not managed to return to profitability, posting operating losses in all years except March 2020, when a marginal positive operating profit of ₹0.11 crores was recorded.
Profit before tax and profit after tax have remained in the red throughout the period, with losses deepening from ₹0.09 crores in March 2020 to ₹0.20 crores in March 2025. Earnings per share have reflected this trend, moving from a negative ₹0.06 in March 2020 to a negative ₹0.13 in March 2025. The operating profit margin and PAT margin have also been negative, indicating sustained unprofitability.
Balance Sheet and Financial Position
Tarai Foods’ balance sheet reveals a deteriorating net worth position, with shareholder’s funds declining from a negative ₹1.10 crores in March 2020 to a negative ₹2.70 crores in March 2025. The company’s reserves have been negative since March 2021, reflecting accumulated losses. Total liabilities have remained relatively stable, around ₹3.0 crores, with long-term borrowings constituting the majority of debt, primarily secured loans in recent years.
On the asset side, net block values have decreased steadily from ₹2.59 crores in March 2020 to ₹1.84 crores in March 2025, indicating depreciation and limited capital expenditure. Current assets have fluctuated but remained modest, with cash and bank balances improving slightly to ₹0.81 crores in March 2025. However, net current assets have been negative, signalling working capital constraints.
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Cash Flow and Operational Insights
Cash flow data for Tarai Foods indicates minimal activity, with no reported cash inflows or outflows from operating, investing, or financing activities in recent years. This lack of cash movement suggests limited operational activity and investment, consistent with the declining revenue and asset base. The company’s cash and cash equivalents have remained low, though slightly improved in the latest fiscal year.
Overall, Tarai Foods has faced persistent financial challenges characterised by declining sales, sustained losses, and a weakening balance sheet. The company’s inability to generate positive operating cash flows and improve profitability raises concerns about its operational viability and financial sustainability in the near term.
Conclusion
In summary, Tarai Foods’ historical performance over the past six years has been marked by a steady decline in revenue and profitability, accompanied by a deteriorating financial position. Despite some minor improvements in cash balances, the company continues to report losses and negative shareholder equity. Investors should carefully consider these factors when evaluating Tarai Foods’ prospects and compare it with other opportunities in the sector.
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