Revenue and Profitability Overview
For the year ending 31 March 2018, United Nilgiri reported total operating income of ₹57.58 crores, entirely derived from net sales, as other operating income was negligible. The company managed its costs effectively, with raw material expenses at ₹15.75 crores and manufacturing expenses close behind at ₹15.27 crores. Employee costs were significant at ₹18.40 crores, reflecting the company’s investment in human resources. Total expenditure excluding depreciation stood at ₹48.87 crores, enabling an operating profit before other income of ₹8.72 crores.
Other income contributed an additional ₹9.31 crores, lifting the operating profit (PBDIT) to ₹18.02 crores. After accounting for minimal interest expenses of ₹0.07 crores and depreciation of ₹2.66 crores, the profit before tax reached ₹15.30 crores. The company’s tax outgo was ₹3.15 crores, resulting in a consolidated net profit of ₹11.79 crores. This translated into a healthy profit after tax margin of 21.1%, underscoring efficient cost management and strong operational performance.
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Balance Sheet Strength and Asset Composition
United Nilgiri’s balance sheet as of March 2018 reflects a strong equity base with shareholder’s funds rising to ₹116.19 crores from ₹101.51 crores the previous year. This increase was primarily driven by reserves, which grew from ₹96.52 crores to ₹111.19 crores, indicating retained earnings accumulation and financial prudence. The company maintained a debt-free status, with no long-term or short-term borrowings reported, enhancing its financial stability and reducing interest burden risks.
On the asset side, the gross block of fixed assets increased to ₹24.16 crores, with net block standing at ₹21.37 crores after depreciation. Capital work in progress also rose modestly to ₹0.45 crores, signalling ongoing investments in capacity or infrastructure. Non-current investments saw a significant jump to ₹78.73 crores, up from ₹58.76 crores, suggesting strategic deployment of surplus funds. Current assets totalled ₹23.53 crores, though cash and bank balances declined to ₹7.51 crores from ₹18.61 crores, reflecting changes in working capital and investment activities.
Cash Flow and Liquidity Analysis
Cash flow from operating activities decreased to ₹6.32 crores in FY18 from ₹9.48 crores in FY17, impacted by a negative change in working capital of ₹3.12 crores. Despite this, the company generated a positive cash flow after working capital adjustments of ₹9.78 crores. Investing activities continued to be cash outflows, amounting to ₹6.25 crores, consistent with prior year trends, reflecting ongoing capital expenditure and investments. Financing activities also recorded outflows of ₹1.60 crores, primarily due to repayments or dividend payments.
Overall, United Nilgiri experienced a net cash outflow of ₹1.53 crores during the year, resulting in closing cash and cash equivalents of ₹1.41 crores. While this represents a reduction from the previous year’s ₹2.93 crores, the company’s zero debt position and strong reserves provide a comfortable liquidity cushion.
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Summary and Investor Considerations
United Nilgiri’s historical financial performance up to March 2018 reveals a company with solid revenue generation, strong profitability margins, and a robust balance sheet free of debt. The earnings per share stood at ₹23.6, reflecting commendable returns to shareholders. The company’s operating profit margin excluding other income was 15.14%, while the gross profit margin was a healthy 31.18%, indicating effective cost control and operational efficiency.
Despite a slight decline in cash reserves, the firm’s substantial reserves and zero borrowings underpin its financial resilience. Investors should note the company’s consistent investment in fixed assets and non-current investments, signalling a focus on long-term growth. However, the reduction in operating cash flow and net cash outflow warrant monitoring to ensure liquidity remains adequate for ongoing operations and expansion.
Overall, United Nilgiri presents a stable financial profile with strong fundamentals, making it a noteworthy consideration for investors seeking exposure to a financially disciplined microcap entity.
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