How has been the historical performance of TVS Elec.?

Revenue and Profit Trends

Examining the consolidated annual results from March 2013 to March 2019, TVS Elec. experienced a substantial increase in net sales, rising from ₹235.13 crores in 2013 to a peak of ₹4,112.78 crores in 2018 before declining to ₹2,760.71 crores in 2019. This volatility reflects shifts in market demand and operational scale. Other operating income remained minimal throughout this period, contributing insignificantly to total operating income.

Operating profit before depreciation, interest, and tax (PBDIT) excluding other income showed a steady rise from ₹8.20 crores in 2013 to ₹23.33 crores in 2018, before easing to ₹16.05 crores in 2019. Including other income, operating profit peaked at ₹25.54 crores in 2018 and declined to ₹19.79 crores in 2019. Profit before tax followed a similar pattern, with a notable turnaround from a loss in 2013 to a profit of ₹23.20 crores in 2018, then moderating to ₹15.61 crores in 2019.

Profit after tax (PAT) improved markedly from a loss of ₹4.20 crores in 2013 to a profit of ₹15.00 crores in 2018, before settling at ₹8.83 crores in 2019. The consolidated net profit mirrored this trend, rising from a negative ₹4.20 crores in 2013 to ₹16.15 crores in 2018, then declining to ₹9.85 crores in 2019. Earnings per share (EPS) reflected these changes, increasing from a negative ₹2.38 in 2013 to ₹8.68 in 2018, before dropping to ₹5.29 in 2019.

Cost Structure and Margins

Raw material costs remained relatively stable in absolute terms but fluctuated as a percentage of sales due to revenue volatility. Purchase of finished goods showed significant variation, peaking in 2018 at over ₹4,200 crores before dropping sharply in 2019. Employee costs increased gradually from ₹24.58 crores in 2013 to ₹37.37 crores in 2019, reflecting workforce expansion or wage inflation.

Manufacturing expenses and other expenses showed inconsistent patterns, with manufacturing costs peaking around 2016-2018 and other expenses rising notably in 2019. Operating profit margins excluding other income were modest, hovering below 1% in recent years, down from a high of 5.86% in 2015. Similarly, PAT margins remained thin, peaking at 0.79% in 2016 and declining to 0.32% in 2019, indicating tight profitability despite revenue growth.

Balance Sheet and Financial Position

Shareholder's funds increased steadily from ₹42.56 crores in 2014 to ₹86.98 crores in 2019, signalling strengthening equity base. Total reserves also grew consistently, reaching ₹68.04 crores by 2019. The company successfully reduced its total debt from ₹57.96 crores in 2014 to zero by 2019, reflecting improved financial health and deleveraging efforts.

Non-current assets declined gradually, with net block reducing from ₹45.02 crores in 2014 to ₹30.31 crores in 2019, possibly due to asset sales or depreciation. Current assets showed significant fluctuations, notably a sharp decrease in inventories and sundry debtors in 2019 compared to previous years, which may indicate inventory optimisation or changes in receivables management. Net current assets turned positive in 2018 and 2019 after years of negative balances, suggesting improved liquidity.

Cash Flow Analysis

Cash flow from operating activities was positive and growing until 2018, reaching ₹37.73 crores, but turned negative to -₹7.00 crores in 2019. Investing activities consistently showed outflows, with a notable increase in cash used in 2019 at ₹15.00 crores. Financing activities also reflected net outflows, particularly in recent years, consistent with debt repayment and reduced borrowings. Overall, the company experienced a net cash outflow of ₹29.00 crores in 2019, contrasting with inflows in prior years.

Summary and Outlook

TVS Elec.'s historical performance reveals a company that has grown substantially in scale over the past six years, with net sales expanding more than tenfold from 2013 to 2018 before a contraction in 2019. Profitability has remained under pressure, with slim operating and net margins reflecting competitive challenges or cost pressures. The company has made commendable progress in strengthening its balance sheet by eliminating debt and increasing shareholder equity, which bodes well for financial stability.

However, the recent decline in cash flow from operations and net cash outflow in 2019 highlight liquidity concerns that investors should monitor closely. The fluctuations in inventories and receivables suggest ongoing adjustments in working capital management. Overall, while TVS Elec. has demonstrated resilience and growth, its profitability and cash flow trends warrant careful analysis for future investment decisions.

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