How has been the historical performance of Walchand People?

Dec 01 2025 11:03 PM IST

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Walchand People's historical performance from 2008 to 2010 shows declining net sales and increasing losses, with net sales falling to 10.69 crore in March 2010. Despite some improvement in operating profit and reduced losses, the company continued to struggle with profitability, reporting a profit after tax loss of 1.28 crore in March 2010.

Revenue and Operating Income Trends

Examining the consolidated annual results from March 2008 to March 2010, Walchand People's net sales showed a slight fluctuation, with ₹11.26 crores in 2008, rising modestly to ₹11.79 crores in 2009 before declining to ₹10.69 crores in 2010. The total operating income mirrored this trend, remaining identical to net sales as there was no other operating income reported during these years. This indicates a relatively stable but slightly contracting top line, which may reflect subdued demand or competitive pressures in its sector.

Cost Structure and Expenditure Analysis

The company’s expenditure profile reveals a consistent reduction in total expenditure excluding depreciation, from ₹16.20 crores in 2008 to ₹11.83 crores in 2010. Employee costs, a significant component, decreased notably from ₹7.17 crores in 2008 to ₹5.40 crores in 2010, suggesting cost-cutting measures or workforce optimisation. Manufacturing expenses also declined from ₹4.25 crores to ₹2.72 crores over the same period. However, other expenses fluctuated, rising to ₹3.64 crores in 2010 from ₹3.26 crores in 2008. Selling and distribution expenses dropped sharply from ₹1.52 crores in 2008 to a minimal ₹0.07 crores in 2010, which could indicate reduced marketing efforts or a shift in sales strategy.

Profitability and Margins

Walchand People has struggled to achieve profitability, with operating profit before depreciation and interest (PBDIT) excluding other income remaining negative throughout the period, though the loss narrowed from -₹4.94 crores in 2008 to -₹1.15 crores in 2010. Including other income, the company reported a marginal positive operating profit of ₹0.23 crores in 2010, a significant improvement from losses in previous years. Despite this, interest expenses increased slightly to ₹0.36 crores in 2010, and after accounting for depreciation and exceptional items, the company posted a gross loss before tax of ₹0.22 crores in 2010, an improvement from larger losses in prior years.

Net Profit and Earnings Per Share

The net profit after tax remained negative, though losses narrowed from -₹6.05 crores in 2008 to -₹1.28 crores in 2010. Correspondingly, earnings per share improved from a loss of ₹-21.24 in 2008 to ₹-4.4 in 2010, reflecting the company’s efforts to reduce losses but still indicating unprofitable operations. The profit after tax margin improved from -53.76% in 2008 to -11.96% in 2010, signalling progress but continued challenges in achieving sustainable profitability.

Cash Flow and Financial Position

Cash flow data available for the year ending March 2009 shows that despite a loss before tax of ₹-1.97 crores, the company generated positive cash flow from operating activities amounting to ₹22.19 crores. This was largely driven by significant changes in working capital, which contributed ₹25.38 crores, indicating effective management of receivables, payables, or inventory. Investing activities yielded a small positive cash flow of ₹0.75 crores, while financing activities resulted in an outflow of ₹23.06 crores. The net cash outflow was minimal at ₹0.10 crores, with closing cash and cash equivalents standing at ₹0.45 crores, slightly down from ₹0.56 crores at the start of the year. This suggests that while the company faced operational losses, it maintained liquidity through working capital adjustments and financing activities.

Shareholding and Equity

The equity capital remained stable at around ₹2.85 to ₹2.90 crores over the three years, with a face value of ₹100 per share. Public shareholding increased marginally from 47.02% in 2008 to 49.25% in 2010, while promoter holdings remained unpledged, indicating no encumbrances on promoter shares. Reserves declined from ₹7.16 crores in 2008 to ₹3.23 crores in 2010, reflecting accumulated losses over the period.

Summary and Outlook

Walchand People’s historical performance over the three-year period ending March 2010 highlights a company grappling with declining revenues and persistent losses. Although the firm has made strides in reducing operating expenses and narrowing losses, it remains unprofitable with negative margins and earnings per share. The positive cash flow from operations in 2009, driven by working capital management, offers some reassurance regarding liquidity. However, the decline in reserves and continued net losses underscore the need for strategic initiatives to restore profitability and growth. Investors should weigh these factors carefully, considering the company’s financial health and market conditions before making investment decisions.

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