Revenue and Profit Trends
Examining net sales from fiscal year ending March 2019 through March 2025 reveals a peak in revenue around March 2022, with ₹4,647.32 crores, followed by a gradual decline to ₹4,141.97 crores by March 2025. Despite this dip, the company maintained a substantial operating profit, with the operating profit margin (excluding other income) showing a notable contraction from 28.57% in March 2021 to 11.49% in March 2025. This indicates rising costs or pricing pressures impacting operational efficiency.
Profit after tax (PAT) figures have also seen significant variation. The company recorded a high PAT of ₹1,052.81 crores in March 2022, which dropped sharply to ₹759.86 crores by March 2025. Correspondingly, the PAT margin decreased from 22.62% to 19.32% over the same period. Earnings per share (EPS) followed a similar pattern, peaking at 16.94 in March 2022 before settling at 12.94 in March 2025, reflecting the company's fluctuating profitability.
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Cost Structure and Margins
The raw material cost has consistently represented a significant portion of total expenditure, rising from ₹1,981.15 crores in March 2019 to ₹2,621.95 crores in March 2025. Other expenses also increased notably, reaching ₹767.83 crores in the latest fiscal year. Despite these rising costs, the company managed to sustain a gross profit margin of 26.79% in March 2025, a recovery from the lower margins seen in previous years.
Interest expenses have remained relatively low, with a slight increase to ₹29.64 crores in March 2025, while depreciation costs have steadily risen, reflecting ongoing capital investments. Exceptional items, notably in March 2025 and March 2022, have significantly influenced profit before tax, indicating one-off gains or losses impacting reported earnings.
Balance Sheet and Asset Growth
Finolex Inds. has shown robust growth in shareholder’s funds, which more than tripled from ₹1,985.98 crores in March 2020 to ₹6,096.87 crores in March 2025. This growth is supported by increasing reserves, which rose from ₹1,861.88 crores to ₹5,973.20 crores over the same period. The company’s total assets expanded steadily, reaching ₹7,381.93 crores by March 2025, reflecting ongoing investments and business expansion.
Notably, the company carries no long-term borrowings, indicating a strong equity base and conservative leverage. Short-term borrowings fluctuated, peaking at ₹526.41 crores in March 2023 before declining to ₹221.08 crores in March 2025, suggesting improved working capital management.
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Cash Flow and Liquidity
The company’s cash flow from operating activities has generally been positive, with ₹382 crores generated in March 2025, though this is lower than the ₹940 crores recorded in March 2021. Investing activities have seen a shift from negative cash flows in earlier years to a slight positive inflow of ₹8 crores in March 2025, indicating a possible slowdown in capital expenditure or asset acquisitions.
Financing activities consistently showed cash outflows, reflecting debt repayments or dividend distributions. The net cash inflow in March 2025 was ₹42 crores, a recovery from negative cash flows in preceding years. Closing cash and cash equivalents increased significantly to ₹44 crores in March 2025, improving the company’s liquidity position.
Summary of Historical Performance
Overall, Finolex Inds. has experienced a dynamic financial journey marked by revenue fluctuations, variable profit margins, and steady growth in equity and assets. The company’s ability to maintain profitability despite rising costs and market challenges is notable. Its strong balance sheet, absence of long-term debt, and improving cash position provide a solid foundation for future growth. However, investors should consider the variability in earnings and margins when assessing the company’s long-term prospects.
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