How has been the historical performance of Danlaw Tech.?

Dec 02 2025 10:55 PM IST

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Danlaw Tech has experienced significant growth in net sales, increasing from 54.70 Cr in March 2019 to 121.58 Cr in March 2022, alongside improved profitability, with profit after tax rising to 4.16 Cr in March 2022. However, the company faces challenges with rising total liabilities, which increased from 54.33 Cr to 86.45 Cr during the same period.

Revenue Growth and Profitability Trends

Danlaw Tech.’s net sales have exhibited robust expansion, rising from ₹13.09 crores in March 2016 to ₹121.58 crores by March 2022. This nearly tenfold increase over six years underscores the company’s successful scaling of operations. The total operating income mirrored this growth, with no other operating income reported during this period.

Despite the impressive top-line growth, profitability has experienced fluctuations. Operating profit before other income (PBDIT excl. OI) was positive in 2016 at ₹2.14 crores but turned negative in 2019 and 2020, reflecting operational challenges. However, the company rebounded with an operating profit of ₹5.87 crores in 2022. Including other income, operating profit improved further to ₹10.60 crores in 2022, up from ₹7.50 crores in 2021.

Profit before tax followed a similar pattern, with losses recorded in 2019 and 2020 but recovering to ₹4.86 crores in 2022. Correspondingly, profit after tax and consolidated net profit returned to positive territory in 2021 and strengthened in 2022, reaching ₹4.16 crores and ₹4.10 crores respectively. Earnings per share (EPS) reflected this turnaround, rising sharply to ₹11.05 in 2022 from a low of negative ₹12.21 in 2020.

Cost Structure and Margins

The company’s raw material costs have scaled in line with revenue, increasing from ₹0.63 crores in 2016 to ₹80.37 crores in 2022. Employee costs also rose steadily, reflecting workforce expansion and wage inflation, reaching ₹22.80 crores in 2022. Other expenses, which were negligible in earlier years, increased to ₹12.93 crores in 2022, indicating higher operational overheads.

Operating profit margins excluding other income declined from a high of 16.37% in 2016 to 4.83% in 2022, illustrating margin compression amid rapid growth. Gross profit margins followed a similar trend, falling from 26.93% in 2016 to 7.38% in 2022. The profit after tax margin also contracted significantly, from 17.89% in 2016 to 3.42% in 2022, reflecting the impact of increased costs and investments.

Balance Sheet and Financial Position

Danlaw Tech.’s total assets have grown substantially, from ₹25.63 crores in 2017 to ₹86.45 crores in 2022. This growth was supported by increases in both non-current and current assets. Net block, representing fixed assets, expanded from ₹0.69 crores in 2017 to ₹28.67 crores in 2022, signalling capital investments to support business expansion.

Current assets also rose sharply, reaching ₹55.56 crores in 2022, driven by higher inventories and sundry debtors. Inventories increased from ₹0.48 crores in 2017 to ₹28.47 crores in 2022, while sundry debtors grew from ₹5.32 crores to ₹18.31 crores over the same period. Cash and bank balances, however, declined from ₹18.00 crores in 2017 to ₹4.19 crores in 2022, reflecting increased utilisation of cash resources.

On the liabilities side, total debt was introduced in 2021 and rose to ₹10.95 crores by 2022, comprising both long-term and short-term borrowings. Shareholders’ funds remained relatively stable, around ₹22.86 crores in 2022, while minority interest increased to ₹5.71 crores. Other long-term liabilities surged to ₹20.36 crores in 2022, indicating additional financial obligations.

Cash Flow Analysis

Cash flow from operating activities showed improvement in 2022, generating ₹5.00 crores compared to a breakeven position in 2021. This was after adjustments for working capital changes, which negatively impacted cash flow by ₹3.00 crores in 2022. Investing activities consistently consumed cash, with outflows of ₹8.00 crores in both 2021 and 2022, reflecting ongoing capital expenditure.

Financing activities contributed positively in recent years, with ₹4.00 crores raised in 2022, supporting the company’s growth and debt servicing. Despite these movements, the net cash inflow/outflow remained neutral in 2022, stabilising the company’s liquidity position.

Summary and Outlook

Danlaw Tech.’s historical performance reveals a company that has successfully scaled its revenue base while navigating periods of operational losses and margin pressures. The recent return to profitability and positive cash flow from operations are encouraging signs of financial health. However, margin compression and rising debt levels warrant close monitoring.

Investors should consider the company’s growth trajectory alongside its evolving cost structure and capital requirements. The balance sheet expansion and increased liabilities reflect strategic investments, which may support future growth if managed prudently. Overall, Danlaw Tech. presents a case of recovery and expansion with cautious optimism for sustained performance improvement.

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