How has been the historical performance of Divgi Torq?

Nov 24 2025 11:29 PM IST

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Divgi Torq has shown a declining trend in key financial metrics over the past five years, with net sales and profits decreasing significantly, while total assets and liabilities have increased. Despite a slight improvement in cash flow from operating activities, the overall performance indicates reduced profitability and sales.

Revenue and Operating Performance Trends

Over the five-year period ending March 2025, Divgi Torq’s net sales exhibited variability, peaking at ₹271.04 crores in March 2023 before declining to ₹218.92 crores in March 2025. The total operating income mirrored this trend, reflecting the company’s exposure to cyclical market conditions. Raw material costs rose steadily from ₹68.90 crores in March 2021 to ₹93.70 crores in March 2025, indicating inflationary pressures or changes in input mix. Employee costs showed a gradual increase, reaching ₹25.11 crores in the latest fiscal year, consistent with workforce expansion or wage inflation.

Despite the revenue dip in recent years, Divgi Torq maintained a positive operating profit (PBDIT) excluding other income, though this figure declined from ₹74.48 crores in March 2023 to ₹37.36 crores in March 2025. The inclusion of other income, which rose to ₹21.21 crores in March 2025, helped bolster overall operating profit to ₹58.57 crores. However, operating profit margins contracted from a high of 28.06% in March 2022 to 17.07% in March 2025, signalling margin pressures likely due to cost increases or pricing challenges.

Profitability and Earnings Analysis

Profit before tax (PBT) followed a downward trajectory from ₹68.83 crores in March 2023 to ₹33.00 crores in March 2025, reflecting the combined impact of reduced operating profits and increased depreciation expenses, which rose significantly to ₹25.18 crores in the latest year. Interest costs remained minimal, under ₹0.5 crores annually, indicating low leverage. The company’s profit after tax (PAT) declined from ₹51.16 crores in March 2023 to ₹24.39 crores in March 2025, with PAT margins contracting from 18.88% to 11.14% over the same period.

Earnings per share (EPS) also reflected this trend, decreasing from ₹16.73 in March 2023 to ₹7.98 in March 2025. Despite this, the company’s book value per share improved steadily, reaching ₹195.14 by March 2025, signalling enhanced net asset value and shareholder equity growth.

Balance Sheet Strength and Asset Management

Divgi Torq’s balance sheet has strengthened considerably, with shareholder’s funds rising from ₹295.88 crores in March 2021 to ₹596.77 crores in March 2025. Total liabilities increased moderately to ₹660.45 crores, but the company’s debt levels remain exceptionally low, with total debt at just ₹0.23 crores in March 2025, underscoring a conservative capital structure. The net block of fixed assets expanded significantly, more than doubling from ₹104.15 crores in March 2021 to ₹254.29 crores in March 2025, reflecting ongoing capital investments.

Current assets grew robustly to ₹395.41 crores in March 2025, supported by substantial cash and bank balances of ₹284.83 crores, which provide ample liquidity. Inventories and sundry debtors also increased, consistent with business scale expansion. The company’s contingent liabilities remained stable around ₹6 crores, indicating manageable off-balance sheet risks.

Cash Flow Dynamics

Operating cash flow demonstrated resilience, with cash generated from operations rising from ₹26 crores in March 2021 to ₹35 crores in March 2025, despite fluctuations in working capital. Investing activities showed significant outflows in recent years, notably a large ₹213 crores outflow in March 2023, likely related to capital expenditure. Financing activities mostly reflected outflows, consistent with debt repayments and shareholder returns. The net cash position fluctuated, ending with a modest outflow of ₹16 crores in March 2025, but the company maintained a strong cash balance overall.

Summary of Historical Performance

In summary, Divgi Torq’s historical performance over the last five years reveals a company that has experienced revenue volatility and margin compression but has simultaneously strengthened its financial foundation. The decline in sales and profitability in recent years contrasts with a robust balance sheet characterised by low debt and strong liquidity. Capital investments have expanded the asset base, positioning the company for future growth. Investors should weigh the recent earnings softness against the firm’s solid financial health and strategic investments when considering its long-term prospects.

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