How has been the historical performance of Eureka Forbes?

Revenue and Profit Growth Trajectory

Starting from a modest base of ₹7.85 crores in net sales in the fiscal year ending March 2021, Eureka Forbes has witnessed a substantial surge in revenue, reaching ₹2,436.91 crores by March 2025. This growth reflects a strategic expansion and improved market penetration. The operating profit margin, which was deeply negative at -16.82% in 2021, has steadily improved to 10.9% in 2025, signalling enhanced operational efficiency and cost management.

Profit after tax (PAT) has followed a similar upward trend, moving from a loss of ₹1.63 crores in 2021 to a healthy profit of ₹164.41 crores in 2025. Correspondingly, earnings per share (EPS) have risen from a negative ₹3.37 to ₹8.5 over the same period, underscoring the company’s turnaround and value creation for shareholders.

Cost Structure and Margins

The company’s total expenditure excluding depreciation has increased in line with revenue, from ₹9.17 crores in 2021 to ₹2,171.33 crores in 2025. Raw material costs and employee expenses have scaled proportionately, reflecting the company’s operational expansion. Notably, manufacturing expenses and other operating costs have remained relatively stable as a percentage of sales, contributing to margin improvement.

Gross profit margin has improved significantly from a negative 18.85% in 2021 to 11.44% in 2025, indicating better pricing power and cost control. The PAT margin has also expanded from a negative 20.76% to 6.75%, reinforcing the company’s enhanced profitability profile.

Balance Sheet and Financial Position

Eureka Forbes’ balance sheet reflects strengthening shareholder equity, with net worth rising from a negligible ₹0.14 crores in 2021 to ₹4,408.69 crores in 2025. The company has successfully reduced its total debt from ₹242.80 crores in 2022 to zero by 2025, signalling a debt-free status that improves financial stability and reduces interest burden.

Assets have remained broadly stable around ₹6,300 crores, with net block of fixed assets consistently above ₹5,400 crores, indicating sustained capital investment. Current assets have increased, supported by rising cash and bank balances, which grew from ₹0.52 crores in 2021 to ₹251.66 crores in 2025, enhancing liquidity.

Cash Flow and Operational Efficiency

Cash flow from operating activities has shown a consistent upward trajectory, rising from ₹0 crores in 2021 to ₹246 crores in 2025. This improvement highlights the company’s enhanced ability to generate cash from core operations. Investing activities have involved significant outflows, particularly in 2025 with ₹168 crores spent, reflecting ongoing capital expenditure and growth initiatives.

Financing activities have seen net outflows, indicating repayment of debt and reduced reliance on external borrowings. The net cash inflow in 2025 stood at ₹34 crores, supporting a healthy cash position and operational flexibility.

Outlook and Investor Considerations

Overall, Eureka Forbes has transitioned from a loss-making entity with minimal sales to a profitable, debt-free company with strong revenue growth and improving margins. The consistent rise in earnings per share and shareholder funds suggests value creation for investors. However, the company’s current market positioning and competitive landscape should be analysed alongside these financial metrics for a comprehensive investment decision.

Investors should also consider the company’s capital expenditure plans and cash flow dynamics, which indicate ongoing investments to sustain growth. The improved profitability and balance sheet strength provide a solid foundation for future expansion.

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