Revenue and Operating Performance Trends
Over the past seven years, Axel Polymers’ net sales have shown considerable volatility. Starting from ₹24.37 crores in March 2019, sales dipped slightly in the following years before surging to a peak of ₹127.92 crores in March 2024. However, the latest fiscal year ending March 2025 saw a sharp decline to ₹78.09 crores. This fluctuation reflects the company’s exposure to market dynamics and possibly operational challenges.
Operating profit margins have also varied, with the operating profit margin excluding other income ranging between 4.53% and 6.9% during this period. The margin peaked in March 2021 at 6.9%, indicating efficient cost management relative to sales at that time. The latest margin of 5.08% in March 2025 suggests a moderate operating profitability despite the revenue drop.
Raw material costs have consistently represented a substantial portion of total expenditure, often exceeding net sales, which has pressured gross profitability. For instance, in March 2025, raw material costs stood at ₹82.73 crores against net sales of ₹78.09 crores, indicating tight margins and potential inventory management issues, as reflected by the negative change in stocks.
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Profitability and Earnings Analysis
Profit before tax (PBT) and profit after tax (PAT) have mirrored the revenue trends, with PBT peaking at ₹2.29 crores in March 2024 before falling sharply to ₹0.31 crores in March 2025. Similarly, PAT reached ₹1.56 crores in March 2024 but declined to ₹0.17 crores in the latest fiscal year. This decline in profitability is also reflected in the PAT margin, which dropped to 0.22% in March 2025 from 1.22% the previous year.
Earnings per share (EPS) have followed a similar pattern, with a high of 1.83 in March 2024 falling to 0.2 in March 2025. This sharp reduction in EPS highlights the challenges Axel Polymers faces in maintaining profitability amid fluctuating sales and rising costs.
Interest expenses have increased over the years, reaching ₹3.23 crores in March 2025, which has further squeezed the company’s gross profit before depreciation and tax. The rising interest burden indicates increased leverage, which could pose risks if not managed prudently.
Balance Sheet and Financial Position
Axel Polymers’ balance sheet reveals a steady increase in total assets from ₹16.02 crores in March 2020 to ₹67.42 crores in March 2025. Shareholders’ funds have also grown, reaching ₹15.14 crores in the latest fiscal year, supported by rising reserves. The book value per share has improved from ₹4.63 in March 2020 to ₹17.77 in March 2025, reflecting enhanced net asset value per share.
However, the company’s debt levels have escalated significantly, with total debt rising from ₹7.45 crores in March 2020 to ₹34.08 crores in March 2025. Short-term borrowings constitute the majority of this debt, increasing to ₹27.62 crores in the latest year. This heightened leverage could impact financial flexibility and increase interest costs, as observed.
Current assets have grown in tandem with liabilities, with inventories and sundry debtors forming a large part of current assets. The net current assets remain positive but have fluctuated, indicating working capital management challenges.
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Cash Flow and Operational Efficiency
Cash flow from operating activities has been inconsistent, with a negative cash flow of ₹3 crores in March 2025 contrasting with positive inflows in prior years. Changes in working capital have often been a drag on cash flow, particularly in the latest fiscal year. Investing activities have been minimal, while financing activities have provided some cash inflow, mainly through increased borrowings.
Closing cash and cash equivalents have improved slightly to ₹2 crores in March 2025, but overall liquidity remains tight given the company’s debt profile and working capital demands.
In summary, Axel Polymers has demonstrated growth in scale and net asset value over recent years but faces challenges in sustaining profitability and managing rising debt. Investors should carefully consider these factors alongside market conditions when evaluating the company’s prospects.
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