Revenue and Profitability Trends
Over the seven-year period ending March 2025, Aarvi Encon’s net sales exhibited a robust upward trend, climbing from ₹206.04 crores in 2019 to ₹510.39 crores in 2025. This represents a compound growth that underscores the company’s expanding market presence and operational scale. Notably, the revenue saw a significant jump between 2021 and 2022, rising from ₹201.79 crores to ₹288.55 crores, and continued to accelerate thereafter.
Operating profit before depreciation and interest (PBDIT) excluding other income showed some variability, peaking at ₹18.21 crores in 2023 before moderating to ₹13.39 crores in 2025. Including other income, operating profit reached ₹15.87 crores in 2025, slightly higher than the previous year’s ₹14.85 crores. Despite the revenue growth, operating profit margins have contracted from 5.35% in 2019 to 2.62% in 2025, reflecting increased expenditure pressures, particularly in employee and other operating costs.
Profit after tax (PAT) followed a similar pattern, rising from ₹8.63 crores in 2019 to a peak of ₹14.51 crores in 2023, before easing to ₹10.04 crores in 2025. The PAT margin declined from 4.19% in 2019 to 1.97% in 2025, indicating tighter profitability despite higher absolute profits. Earnings per share (EPS) mirrored this trend, reaching a high of 9.82 in 2023 and settling at 6.78 in 2025.
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Balance Sheet and Financial Position
The company’s balance sheet reflects consistent strengthening of shareholder funds, which rose from ₹76.32 crores in 2020 to ₹125.32 crores in 2025. Total reserves also increased steadily, reaching ₹109.57 crores in 2025, up from ₹55.40 crores in 2019. This growth in equity base supports the company’s expanding operations and provides a cushion against financial risks.
Total liabilities have increased in line with business growth, rising from ₹117.85 crores in 2020 to ₹212.90 crores in 2025. Notably, total debt surged to ₹26.78 crores in 2025 from ₹3.40 crores in 2023, indicating a higher reliance on borrowings to finance expansion or working capital needs. Short-term borrowings accounted for the majority of this increase, reaching ₹23.45 crores in 2025.
On the asset side, total assets grew from ₹117.85 crores in 2020 to ₹212.90 crores in 2025, with net block (fixed assets) increasing to ₹17.70 crores in 2025. Current assets also expanded significantly, reaching ₹162.62 crores, driven by higher sundry debtors and other current assets, which may reflect increased sales and receivables.
Book value per share improved from ₹51.63 in 2020 to ₹83.98 in 2025, signalling enhanced net worth per equity share over the years.
Cash Flow and Liquidity
Cash flow from operating activities has been somewhat volatile, with a negative outflow of ₹2 crores in 2025 following a positive ₹3 crores in 2024. This fluctuation is partly due to significant changes in working capital, which saw a negative impact of ₹16 crores in 2025. Investing activities reflected a cash outflow of ₹12 crores in 2025, likely related to capital expenditure or asset acquisitions.
Financing activities provided a cash inflow of ₹11 crores in 2025, consistent with the rise in borrowings. Overall, the net cash outflow stood at ₹3 crores in 2025, with closing cash and cash equivalents at ₹6 crores, down from ₹10 crores the previous year. This indicates a tighter liquidity position that warrants monitoring.
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Summary of Historical Performance
In summary, Aarvi Encon has shown commendable growth in revenue and shareholder equity over the past several years, reflecting successful business expansion. However, profitability margins have narrowed, and cash flow from operations has experienced some strain, partly due to working capital demands and increased borrowings. The company’s rising debt levels and reduced cash reserves suggest a need for careful financial management going forward.
Investors should weigh the company’s strong top-line growth and equity base against the challenges in margin sustainability and liquidity. The improving book value per share and consistent profit generation remain positive indicators, while the evolving debt profile and cash flow volatility highlight areas for ongoing scrutiny.
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