Revenue and Operating Performance Trends
Over the past seven years, Zenith Exports’ net sales have demonstrated significant volatility. The company recorded its highest sales in the fiscal year ending March 2019, with nearly ₹99 crores, followed by a notable dip and recovery pattern. Sales peaked again in March 2022 at over ₹90 crores but declined to approximately ₹72 crores by March 2025. This fluctuation reflects varying market conditions and operational challenges.
Operating income closely mirrors sales trends, with total expenditure excluding depreciation generally aligning with revenue movements. Raw material costs have remained a substantial portion of expenses, ranging from around ₹28 crores to ₹57 crores in earlier years, indicating the company’s reliance on input costs. Employee costs have steadily increased, reaching nearly ₹9 crores in the latest fiscal year, reflecting possible workforce expansion or wage inflation.
Despite these efforts, Zenith Exports has struggled with operating profitability. The operating profit margin excluding other income has mostly been negative, with a slight positive margin only in March 2022. The company’s operating profit (PBDIT) excluding other income has been negative in most years, indicating challenges in core business profitability. However, other income has provided some cushion, contributing to a positive operating profit in several years, including a near breakeven in the latest fiscal year.
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Profitability and Earnings Analysis
Profit before tax has shown a gradual improvement from significant losses in earlier years to positive figures in recent fiscal periods. The company posted a profit before tax of ₹2.40 crores in March 2025, up from losses exceeding ₹9 crores in March 2019. Correspondingly, profit after tax has turned positive since March 2022, with the latest fiscal year reporting ₹1.71 crores. Earnings per share have followed this trend, moving from negative values in the earlier years to a positive ₹3.17 in March 2025.
Margins have also improved, with the profit after tax margin rising to 2.37% in the latest year from a negative margin of nearly 8% in 2019. This indicates a gradual recovery in operational efficiency and cost management, although operating profit margins remain under pressure.
Balance Sheet and Asset Management
Zenith Exports’ balance sheet reveals a stable equity base with share capital constant at ₹5.40 crores and reserves steadily increasing to ₹76.57 crores by March 2025. Shareholders’ funds have grown consistently, reaching nearly ₹82 crores, reflecting retained earnings accumulation. The company maintains a low level of long-term borrowings, with secured loans marginally present in recent years.
Current liabilities have fluctuated but remain manageable relative to current assets, which have hovered around ₹70-80 crores. Inventories and sundry debtors have shown some variation, with inventories decreasing from a peak of nearly ₹40 crores in 2022 to about ₹24 crores in 2025, suggesting improved inventory management. Cash and bank balances have remained healthy, increasing to ₹28.76 crores in the latest fiscal year, supporting liquidity.
Net block of fixed assets has declined over the years from ₹14.61 crores in 2020 to ₹11.19 crores in 2025, indicating some asset depreciation or disposals. Non-current investments have increased, signalling possible diversification or strategic investments.
Cash Flow and Financial Stability
Cash flow from operating activities has been inconsistent, with positive inflows in some years and negative in others. The latest fiscal year saw a negative operating cash flow of ₹3 crores, reflecting working capital pressures or operational challenges. Investing activities have also fluctuated, with significant outflows in recent years. Financing activities have been modest, with minor inflows and outflows, indicating limited reliance on external funding.
Overall, the company’s net cash position has varied, ending with ₹6 crores in cash and equivalents in March 2025, down from ₹12 crores the previous year. This suggests a cautious liquidity stance amid operational fluctuations.
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Summary of Historical Performance
In summary, Zenith Exports has navigated a challenging financial landscape marked by fluctuating sales and profitability. While the company has made strides in improving its bottom line and strengthening its equity base, operating margins remain under pressure. The balance sheet reflects prudent management of liabilities and a solid liquidity position, though cash flow volatility warrants attention. Investors should weigh these factors carefully, considering both the company’s recovery trajectory and the inherent risks in its operational performance.
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