How has been the historical performance of Gayatri Highways?

Revenue and Operating Performance

Gayatri Highways' net sales have demonstrated considerable volatility. The company recorded robust revenues in fiscal years 2019 to 2022, peaking at nearly ₹93 crores in March 2022. However, this was followed by a sharp decline in subsequent years, with net sales dropping to ₹5.69 crores by March 2025. The absence of other operating income throughout this period indicates that the company’s revenue streams have been solely reliant on its core operations.

Operating expenses have also varied, with manufacturing expenses decreasing from over ₹20 crores in 2019 to around ₹5.36 crores in 2025. Employee costs have remained relatively low, reflecting a lean operational structure. Despite these cost controls, the company faced negative operating profits excluding other income in recent years, notably a loss of ₹4.72 crores in March 2025. However, other income, which includes non-operating revenues, has provided a crucial buffer, contributing over ₹20 crores in the latest fiscal year and helping to generate a positive operating profit of ₹15.46 crores in March 2025.

Profitability and Exceptional Items

The company’s profitability has been erratic, with profit before tax swinging from a loss of ₹80 crores in 2019 to a profit of ₹171 crores in 2023, before plunging back into losses and then a modest profit of ₹0.30 crores in 2025. Exceptional items have played a significant role in these fluctuations, with a substantial positive exceptional item of over ₹1,125 crores recorded in March 2025, which greatly influenced the consolidated net profit, pushing it to ₹1,128.96 crores that year. Conversely, prior years saw negative exceptional adjustments impacting the bottom line adversely.

Earnings per share have mirrored this volatility, with negative values from 2019 through 2024, turning sharply positive to ₹47.11 in 2025. Operating profit margins excluding other income have been negative in recent years, contrasting with strong positive margins above 66% during 2019 to 2022, underscoring the operational challenges faced by the company.

Balance Sheet and Financial Position

Gayatri Highways’ balance sheet reflects a complex financial structure. Shareholder funds have remained negative throughout the period, indicating accumulated losses and reserves deficits. Total liabilities have decreased from nearly ₹2,860 crores in 2020 to ₹1,000 crores in 2025, signalling some deleveraging. Long-term borrowings have also reduced significantly from over ₹750 crores in 2021 to approximately ₹304 crores in 2025, while short-term borrowings have remained relatively stable.

On the asset side, net block values have sharply declined from ₹911 crores in 2020 to under ₹1 crore in 2025, reflecting asset disposals or impairments. Non-current investments have also decreased but remain a notable component of total assets. Current assets have fluctuated, with cash and bank balances improving to ₹20.37 crores in 2025 from lower levels in previous years. The company’s contingent liabilities remain substantial, exceeding ₹4,000 crores in 2025, highlighting ongoing financial risks.

Cash Flow Trends

Cash flow from operating activities has shown resilience despite profitability challenges, with inflows peaking at ₹1,712 crores in 2020 and stabilising around ₹311 crores in 2024. Investing activities have been mixed, with occasional outflows reflecting capital expenditure and asset management. Financing activities have consistently seen outflows, indicative of debt repayments or other financing adjustments. Net cash inflows have been modest in recent years, with closing cash and cash equivalents improving to ₹10 crores in 2024 and ₹20 crores in 2025, providing some liquidity comfort.

Conclusion

Gayatri Highways’ historical performance reveals a company navigating significant operational and financial headwinds. While earlier years showed strong revenue and operating margins, recent years have been marked by sharp declines in sales and fluctuating profitability heavily influenced by exceptional items. The balance sheet reflects ongoing restructuring efforts with reduced liabilities and improved cash positions, yet negative shareholder funds and high contingent liabilities remain concerns. Investors should weigh these factors carefully when considering the company’s prospects in the infrastructure and highways sector.

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