Narmada Macplast revenue doubles but profit falls as receivables exceed revenue
FY26 revenue jumped to ₹13.31 crore from ₹6.98 crore, but net profit fell to ₹1.68 crore as a one-time gain vanished. Trade receivables of ₹13.55 crore now exceed the full year's sales.
What's new
- Annual revenue from operations nearly doubled to ₹13.31 crore from ₹6.98 crore in FY25.
- Net profit fell to ₹1.68 crore from ₹5.39 crore, losing a ₹5.82 crore one-time disposal gain.
- Trade receivables surged to ₹13.55 crore from ₹2.90 crore, exceeding the year's total revenue.
Why this matters
The top-line growth is real, but the profit decline is an accounting artifact. The balance sheet is the problem. A company that just earned ₹13.31 crore in revenue is owed ₹13.55 crore by its customers. That signals a severe cash crunch or aggressive sales booking.
What we're watching
- Whether the ₹13.55 crore receivables pile is collected or turns into bad debts.
- If the revenue growth trajectory continues in FY27.
- Cash-flow generation once the working-capital spike normalises.
The full read
Narmada Macplast more than doubled its annual revenue to ₹13.31 crore in FY26, up 91% from ₹6.98 crore. But profit didn't follow. Net income dropped to ₹1.68 crore from ₹5.39 crore because the prior year included a ₹5.82 crore one-time gain from selling property. Strip out that non-repeating item and the core operation grew. The real red flag is on the balance sheet. Trade receivables surged to ₹13.55 crore, up from ₹2.90 crore, meaning the company is owed more by customers than it earned in sales for the entire year. That is a severe working-capital lock-up. Equity rose to ₹9.40 crore from ₹7.73 crore via a share issuance, providing some buffer. But the receivables load now overshadows the revenue achievement. For a nano-cap business, the open question is whether this cash is collectible or signals a deeper issue.
Questions answered
- Why did profit fall when revenue nearly doubled?
- The prior year's net profit of ₹5.39 crore included a one-time gain of ₹5.82 crore from a property disposal. That gain did not recur in FY26, causing profit to fall to ₹1.68 crore despite the revenue surge.
- Is the working-capital position a problem?
- Yes. Trade receivables of ₹13.55 crore exceed the company's entire annual revenue of ₹13.31 crore. This suggests Narmada is owed more by customers than it earned in sales for the whole year, tying up cash.
- How did the balance sheet change during the year?
- Total equity rose to ₹9.40 crore from ₹7.73 crore due to a share issuance. This was offset by a sharp increase in trade receivables and current liabilities, adding short-term pressure.
- What does the revenue growth imply about the business?
- The 91% revenue jump reflects strong sales growth, but its quality is questionable given the receivables surge. Without knowing the collection timeline, it's hard to assess if this is sustainable growth or aggressive booking.