Modella Woollens Reports Widening Losses in Q3 FY25 Amid Minimal Revenue and Operational Struggles

Mumbai, India – January 29, 2025—Modella Woollens Limited (BSE: 503772) has reported a substantial revenue decline and widening losses in its unaudited financial results for Q3 FY25, reflecting continued operational challenges and uncertainty regarding future income streams.

Financial Performance: Q3 FY25​

Standalone Financial Highlights (₹ in Lakhs)​

• Revenue from Operations: ₹0.03 crore (down 98.6% YoY) from ₹2.08 crore in Q3 FY24.
• Total Income: ₹0.03 crore, compared to ₹4.76 crore in Q2 FY25.
• Net Loss Before Tax: ₹(6.27) crore (widened from ₹(3.46) crore in Q3 FY24).
• Net Loss After Tax: ₹(6.19) crore (wider than ₹(3.40) crore in Q3 FY24).
• Total Comprehensive Income: ₹(6.19) crore, compared to ₹(3.40) crore in Q3 FY24.
• Earnings Per Share (EPS): ₹(0.68) per share, compared to ₹(0.37) in Q3 FY24.

For the nine months ending December 31, 2024:

• Revenue from Operations: ₹5.23 crore (down 34.1% YoY) from ₹7.94 crore.
• Net Loss After Tax: ₹(12.36) crore (compared to ₹(12.83) crore in FY24).

Operational Challenges and Key Observations​

• Revenue has almost disappeared, indicating severe business contraction.
• Cost of materials and inventory management issues persist, leading to high operational losses.
• Employee benefit expenses remain constant despite falling revenue, putting further margin pressure.
• Deferred tax has not been accounted for, reflecting uncertainty regarding future profits.
• No exceptional items were reported, indicating that operational losses are recurring.

Strategic Outlook and Market Position​

• No visible turnaround strategy has been communicated, leading to concerns about long-term sustainability.
• Cash flow concerns persist, given the lack of significant revenue generation.
• Given the continued negative earnings, market response and investor confidence are likely to be impacted.

Investor Considerations​

• The company continues to burn cash with no revenue recovery in sight.
• Ongoing financial losses may require restructuring or external financing.
• Stock performance may remain under pressure, given the declining fundamentals.

Conclusion​

Modella Woollens Limited remains in a precarious financial position, with minimal revenue, continued losses, and operational inefficiencies. Investors will closely watch for restructuring plans or business pivots in the coming quarters to gauge the company’s ability to reverse its financial downturn.