Revenue and Profit Growth
Over the six-year period ending December 2024, Foseco India’s net sales have exhibited a strong upward trajectory, rising from ₹362.16 crores in 2018 to ₹524.78 crores in 2024. This represents a compound growth trend, with notable acceleration post-2020, reflecting recovery and expansion following the pandemic-impacted year. The total operating income mirrors this pattern, as other operating income remained negligible throughout.
Operating profit before depreciation and interest (PBDIT) excluding other income has also improved significantly, climbing from ₹50.39 crores in 2018 to ₹90.26 crores in 2024. When factoring in other income, operating profit reached ₹108.49 crores in 2024, up from ₹54.82 crores six years prior. This growth underscores enhanced operational efficiency and effective cost management despite rising raw material and employee expenses.
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Profitability Margins and Earnings
Foseco India’s operating profit margin (excluding other income) has improved from 13.91% in 2018 to 17.2% in 2024, indicating better cost control and pricing power. Gross profit margin similarly increased, reaching 20.64% in 2024 from 15.08% in 2018. The profit after tax (PAT) margin has shown a positive trend as well, rising from 8.85% in 2018 to 13.92% in 2024, despite some fluctuations in intermediate years.
Earnings per share (EPS) have more than doubled over the period, from ₹50.16 in 2018 to ₹114.29 in 2024, reflecting strong bottom-line growth and shareholder value creation. The company has maintained a stable equity capital base, with reserves growing substantially from ₹149.72 crores in 2018 to ₹337.01 crores in 2024, supporting its financial solidity.
Balance Sheet Strength and Asset Management
The company’s total assets have expanded from ₹246.80 crores in 2019 to ₹478.61 crores in 2024, nearly doubling in size. This growth is supported by a rise in net block and capital work in progress, indicating ongoing investments in fixed assets. Notably, Foseco India operates with zero long-term and short-term borrowings, highlighting a debt-free capital structure that reduces financial risk.
Current assets have increased significantly, driven by higher cash and bank balances, sundry debtors, and inventories, which align with the company’s expanding operations. Net current assets have also improved, providing ample liquidity to meet short-term obligations. Trade payables and other current liabilities have risen in line with business scale but remain well managed.
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Cash Flow and Financial Discipline
Cash flow from operating activities has shown a positive trend, increasing from ₹46 crores in 2019 to ₹42 crores in 2024, with some volatility in interim years. The company has invested heavily in capital expenditure in 2024, reflected by a significant outflow in investing activities, which may support future growth prospects. Financing activities have consistently seen outflows, indicating repayments or dividend distributions rather than new borrowings.
Despite a net cash outflow in 2024, the company maintains a strong cash and cash equivalent position of ₹90 crores, supported by a healthy opening balance. This liquidity buffer, combined with a zero-debt profile, positions Foseco India favourably to navigate market uncertainties and capitalise on growth opportunities.
Conclusion
Foseco India’s historical performance reflects a company on a steady growth path, characterised by rising revenues, improving profitability, and a robust balance sheet free of debt. Its ability to enhance margins and generate strong earnings per share over the years demonstrates operational efficiency and effective management. While recent capital investments suggest a focus on future expansion, the company’s strong liquidity and reserves provide a solid foundation for sustainable growth.
Investors seeking exposure to the specialty chemicals sector may find Foseco India’s consistent financial track record and prudent financial discipline an attractive proposition, especially given its zero-debt status and improving profitability metrics.
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