Ganga Papers India Reports 49% Drop in Q1 Profit Amid Revenue Decline
Ganga Papers India Limited's Q1 FY2024 results show a significant decline in profitability despite relatively stable revenue. Total revenue stood at Rs. 62.38 crore, down 3.21% quarter-on-quarter and 5.14% year-on-year. Net profit fell sharply by 49.18% to Rs. 0.31 crore compared to the previous quarter. The company's gross profit margin was 22.40%, with an EBITDA margin of 2.60% and a net profit margin of 0.49%. High material costs, accounting for 73.70% of revenue, continue to impact the company's margins.
*this image is generated using AI for illustrative purposes only.
Ganga Papers Limited, a paper manufacturing company, has released its unaudited financial results for the quarter ended June 30, revealing a significant drop in profit despite relatively stable revenue.
Financial Highlights
- Total revenue stood at Rs. 62.38 crore, down 3.21% quarter-on-quarter and 5.14% year-on-year
- Net profit declined to Rs. 0.31 crore, a sharp 49.18% decrease from the previous quarter
- Gross profit margin reported at 22.40%
- EBITDA margin at 2.60%
- Net profit margin at 0.49%
Revenue and Profit Analysis
Ganga Papers India experienced a slight contraction in its top line, with revenue from operations reaching Rs. 62.36 crore, compared to Rs. 64.17 crore in the previous quarter and Rs. 65.73 crore in the same quarter last year. The company's other income stood at Rs. 1.92 lakh, contributing to the total revenue of Rs. 62.38 crore.
Despite the revenue decline, the most notable change was in the company's profitability. Net profit for the quarter was Rs. 30.76 lakh, marking a substantial 49.18% decrease from the Rs. 61.46 lakh reported in the previous quarter. Year-over-year, the profit remained relatively stable with only a marginal 0.36% decline from Rs. 30.87 lakh in the same quarter of the previous year.
Cost Structure and Margins
The company's cost structure reveals that material costs continue to be the most significant expense:
| Expense Category | Amount (Rs. in crore) | % of Revenue |
|---|---|---|
| Cost of Material Consumed | 45.97 | 73.70 |
| Other Expenses | 11.65 | 18.70 |
| Employee Benefits Expense | 0.73 | 1.20 |
| Finance Costs | 0.63 | 1.00 |
| Depreciation and Amortisation | 0.59 | 0.90 |
The high material costs have impacted the company's margins, with the gross profit margin at 22.40%, EBITDA margin at 2.60%, and net profit margin at a slim 0.49%.
Operational Focus
Ganga Papers India Limited continues to operate solely in the paper manufacturing segment. The company's single-segment focus underscores its specialization in the paper industry, but also highlights its vulnerability to sector-specific challenges and raw material price fluctuations.
Auditor's Review
The statutory auditors, RAM K RAJ & ASSOCIATES, conducted a limited review of the financial results. They reported that nothing has come to their attention that causes them to believe the financial statements contain any material misstatements.
Management Commentary
Ramesh Kumar Chaudhary, Chairman of Ganga Papers India Limited, signed off on the financial results. While specific management commentary was not provided, the results were approved by the Board of Directors in their meeting held on August 13.
Looking Ahead
As Ganga Papers India Limited navigates through a challenging quarter with decreased profitability, investors and stakeholders will be keen to observe how the company plans to address the margin pressure and revitalize its growth in the coming quarters. The paper industry's dynamics, including raw material costs and market demand, will likely play crucial roles in shaping the company's performance moving forward.
Note: All financial figures are based on the unaudited results for the quarter ended June 30, as reported by Ganga Papers India Limited.
Historical Stock Returns for Ganga Papers
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| 0.0% | -3.85% | -8.17% | -13.17% | -2.45% | +230.34% |
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