Chandni Machines: Revenue Plummets 76%, Profits Surge on Cost Cuts

INDUSTRIAL-GOODSSERVICES
Whalesbook Logo
AuthorSatyam Jha|Published at:
Chandni Machines: Revenue Plummets 76%, Profits Surge on Cost Cuts
Overview

Chandni Machines posted a sharp 76% YoY revenue decline in Q3 FY25 to ₹4,822.86 lakhs. However, profitability and EPS surged due to drastically reduced expenses and positive fair value changes in investments. While quarterly revenue rebounded 86%, the YoY operational slump raises concerns.

📉 The Financial Deep Dive

The Numbers:
Chandni Machines Limited reported standalone Q3 FY25 results marked by a stark contrast between operational revenue and profitability.

  • Revenue from Operations: Plummeted by 76.00% YoY to ₹4,822.86 lakhs in Q3 FY25, down from ₹20,098.62 lakhs in Q3 FY24. However, a sequential rebound was evident, with revenue increasing by 86.21% QoQ to ₹4,822.86 lakhs from ₹2,589.96 lakhs in Q2 FY25.

  • Profit After Tax (PAT): Saw a substantial increase, reaching ₹185.07 lakhs in Q3 FY25, a significant jump from ₹3.63 lakhs in Q3 FY24 (YoY). This also represents a strong recovery from a net loss of ₹106.34 lakhs in Q2 FY25 (QoQ).

  • Earnings Per Share (EPS): Followed suit, rising to ₹5.73 in Q3 FY25 from ₹0.11 in Q3 FY24 (YoY) and recovering from a diluted loss of ₹3.30 in Q2 FY25 (QoQ).

  • Other Income: The company reported ₹240.86 lakhs in Q3 FY25, primarily from changes in the fair value of its FVTPL investments, a positive swing from losses in the comparable periods of the previous year and quarter.

The Quality:
The most critical observation is the divergence between the revenue trajectory and profitability. The 76% YoY revenue drop signals severe operational challenges or a fundamental shift in demand. The remarkable improvement in PAT and EPS, therefore, cannot be attributed to sales growth. Instead, the gains stem from two main factors:
1. Aggressive Cost Management: Total expenses were drastically reduced YoY, from ₹4,811.05 lakhs to just ₹58.30 lakhs. This indicates stringent cost controls or potentially a scaled-down operational base.
2. Non-Operational Gains: The substantial "Other Income," driven by investment revaluations, provided a significant boost to the bottom line. While positive for reported profits, this reliance on market-driven investment gains makes earnings volatile and less indicative of core business health.
Data on cash flow and balance sheet items, such as net debt or working capital, were not provided in the filing, limiting a comprehensive assessment of financial stability.

Risks & Outlook:
The paramount risk for Chandni Machines lies in its slashed YoY revenue performance. Investors must scrutinize whether this decline is cyclical, temporary, or indicative of a structural issue within the company's core business. The current profitability, boosted by cost-cutting and investment fair value gains, may not be sustainable if operational revenue does not recover significantly. The absence of management guidance or forward-looking commentary in the provided results makes the future outlook highly uncertain. Investors should watch for any subsequent management disclosures or analyst calls to gauge the drivers behind the revenue contraction and the sustainability of current profit levels.

Disclaimer:This content is for educational and informational purposes only and does not constitute investment, financial, or trading advice, nor a recommendation to buy or sell any securities. Readers should consult a SEBI-registered advisor before making investment decisions, as markets involve risk and past performance does not guarantee future results. The publisher and authors accept no liability for any losses. Some content may be AI-generated and may contain errors; accuracy and completeness are not guaranteed. Views expressed do not reflect the publication’s editorial stance.