How has been the historical performance of Ujaas Energy?

Revenue and Profitability Trends

Ujaas Energy's net sales exhibited significant volatility during the period under review. Starting from ₹111.10 crores in March 2015, sales surged to ₹486.35 crores by March 2017 before declining to ₹334.17 crores in March 2018. This fluctuation indicates a period of rapid expansion followed by a contraction in sales volumes or pricing pressures.

The company's operating profit margin, excluding other income, declined steadily from a robust 38.06% in March 2015 to 12.09% in March 2018. Correspondingly, the gross profit margin fell from 23.78% to 7.98% over the same period, signalling rising costs or margin compression. Despite these pressures, Ujaas Energy maintained positive operating profits, with PBDIT (profit before depreciation, interest, and tax) decreasing from ₹42.29 crores in 2015 to ₹40.38 crores in 2018, after peaking at ₹70.68 crores in 2017.

Profit after tax (PAT) followed a similar pattern, rising from ₹11.68 crores in 2015 to ₹36.47 crores in 2017 before retreating to ₹16.96 crores in 2018. The PAT margin also contracted from 10.51% to 5.07%, reflecting the impact of higher interest costs and taxation. Earnings per share (EPS) mirrored these trends, peaking at ₹1.82 in 2017 and falling to ₹0.85 in 2018.

Cost Structure and Expenditure

The company's raw material costs scaled in line with sales, rising from ₹66.68 crores in 2015 to ₹253.40 crores in 2018, though the proportion of raw material cost to sales increased, contributing to margin pressure. Employee costs more than quadrupled from ₹4.99 crores to ₹20.81 crores, reflecting possible expansion or wage inflation. Manufacturing expenses remained relatively stable, fluctuating between ₹12.88 crores and ₹22.39 crores. Notably, there were no reported power costs or selling and distribution expenses during this period, which may be characteristic of the company's operational model.

Interest expenses remained substantial, hovering around ₹16-18 crores annually, which weighed on gross profits and net earnings. Depreciation charges were consistent, averaging around ₹8 crores per annum.

Balance Sheet and Financial Position

Ujaas Energy's total assets grew from ₹363.28 crores in 2015 to ₹550.64 crores in 2018, indicating asset base expansion. Shareholders' funds increased steadily from ₹173.19 crores to ₹215.02 crores, supported by rising reserves. The book value per share improved from ₹6.93 to ₹8.60, signalling enhanced net worth per share.

Total debt, comprising long-term and short-term borrowings, showed a mixed trend. Long-term borrowings decreased from ₹99.37 crores in 2015 to ₹68 crores in 2018, while short-term borrowings rose sharply from negligible levels to ₹59.97 crores, suggesting a shift in the debt profile. Total liabilities increased from ₹363.28 crores to ₹550.64 crores, reflecting the company's growing scale and financial commitments.

Current assets expanded significantly, driven by increases in inventories and sundry debtors, which may indicate higher working capital requirements. Net current assets remained positive but showed some volatility, reflecting changes in operational liquidity.

Cash Flow and Liquidity

Cash flow from operating activities was positive only in the fiscal year ending March 2016, at ₹103.88 crores, but turned negative in subsequent years, reaching a deficit of ₹34.16 crores in 2018. This deterioration was largely due to adverse changes in working capital, which saw significant outflows in 2017 and 2018. Investing activities generated positive cash inflows in 2017 and 2018, contrasting with a large outflow in 2016, indicating asset sales or reduced capital expenditure in recent years.

Financing activities reflected net repayments in 2016 and 2017, with a modest inflow in 2018. Overall, the company experienced a net cash outflow of ₹9.42 crores in 2018, reducing cash and cash equivalents to ₹6.92 crores by year-end, down from ₹16.34 crores the previous year.

These cash flow patterns suggest tightening liquidity and the need for careful working capital management going forward.

Summary

In summary, Ujaas Energy's historical performance over the four years to March 2018 has been marked by rapid revenue growth followed by contraction, declining profitability margins, and a shifting debt profile. While the company has expanded its asset base and strengthened shareholders' funds, challenges remain in sustaining operating margins and managing cash flows effectively. Investors should weigh these factors carefully when considering the company's prospects in the competitive power sector.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →