Sagar Distillery Limited (SAGAR) has reported a sharp increase in sales and operating income in the fourth quarter of the last fiscal year, but the growth in revenue has failed to translate into improved profitability.

According to the company's unaudited financial report, Sagar Distillery's total operating income reached Rs. 47.63 crore by the end of Ashadh, up 145.48% from Rs. 19.40 crore recorded during the corresponding period of the previous fiscal year.

The company's net sales revenue increased 147.72% to Rs. 20.98 crore during the review period. Gross profit also increased 95.79%, indicating that the company generated substantially higher sales and gross earnings compared with the previous year.

However, the improvement in sales and gross profit was not enough to prevent the company from reporting a larger loss. Sagar Distillery recorded a net loss of Rs. 5.72 crore, compared with a loss of Rs. 3.53 crore in the previous fiscal year.

The increase in net loss came despite the significant growth in revenue. Higher selling and distribution costs and financial expenses placed additional pressure on the company's earnings, absorbing the gains generated from increased sales.

The deterioration in profitability was also reflected in the company's earnings per share. Sagar Distillery's EPS stood at negative Rs. 7.89, indicating that the company continued to generate a loss attributable to shareholders during the reporting period.

At the end of the fourth quarter, the company's net worth per share stood at Rs. 119.96. Sagar Distillery has a paid-up capital of Rs. 72.60 crore, while other equity stood at approximately Rs. 14.49 crore.

The latest results highlight a clear gap between the company's top-line growth and bottom-line performance. Operating income and net sales increased by more than 145%, while gross profit also rose substantially. Yet, higher selling, distribution and financial costs resulted in the company's net loss widening from the previous year.

Overall, Sagar Distillery's fourth-quarter results show that the company has significantly expanded its sales compared with the previous year, but has yet to convert that growth into profitability. Unless the company can bring selling and financial costs under control, stronger revenue alone may not be enough to improve its bottom line.