How has been the historical performance of Gokul Refoils?

Revenue and Profitability Trends

Over the past seven years, Gokul Refoils’ net sales have shown a consistent upward trend, increasing from ₹2,197.63 crores in March 2019 to ₹3,510.85 crores in March 2025. This represents a compound growth that underscores the company’s expanding market presence and operational scale. The total operating income mirrors this growth, as other operating income remained nil throughout the period.

Despite rising revenues, operating profit margins have experienced some volatility. The operating profit margin excluding other income peaked at 1.78% in March 2023 but declined to 1.04% by March 2025. Gross profit margins followed a similar pattern, reaching 1.49% in March 2020 before settling at 0.9% in the latest fiscal year. This suggests increasing cost pressures, particularly raw material and finished goods purchases, which have escalated alongside sales.

Profit after tax (PAT) has fluctuated notably, with a high of ₹26.52 crores in March 2022 and a low of ₹1.81 crores in March 2024. The PAT margin correspondingly ranged from 0.92% in March 2020 to a modest 0.06% in March 2024, recovering slightly to 0.42% in March 2025. Earnings per share (EPS) also reflected this variability, peaking at 2.68 in March 2022 before dropping to 0.18 in March 2024 and rebounding to 1.5 in the latest year.

Cost Structure and Expenditure

The company’s cost of raw materials has risen substantially, from ₹1,701.44 crores in March 2019 to ₹2,931.59 crores in March 2025, reflecting both volume growth and input price inflation. Purchases of finished goods have also increased markedly, particularly in the last two years, reaching ₹439.60 crores in March 2025. Other expenses have remained relatively stable, fluctuating around ₹70-90 crores annually. Employee costs have seen a gradual rise, consistent with business expansion.

Interest expenses have been a significant factor, peaking at ₹33.37 crores in March 2025, which has weighed on profitability. Depreciation charges have also increased steadily, in line with asset additions and capital expenditure.

Balance Sheet and Financial Position

Gokul Refoils’ total assets have grown from ₹596.56 crores in March 2020 to ₹767.88 crores in March 2025, supported by increases in both fixed assets and current assets. Net block of assets rose from ₹68.08 crores in March 2021 to ₹96.36 crores in March 2025, indicating ongoing investment in property, plant, and equipment. Non-current investments and long-term loans have also increased, reflecting strategic asset allocation.

Shareholders’ funds have strengthened steadily, rising from ₹277.33 crores in March 2021 to ₹344.57 crores in March 2025. Book value per share has improved correspondingly, reaching ₹34.81 in the latest fiscal year. However, total liabilities have also increased, with total debt climbing to ₹275.98 crores in March 2025 from ₹231.60 crores in March 2020. The company’s long-term borrowings have decreased since March 2023 but short-term borrowings remain elevated, indicating reliance on working capital financing.

Cash Flow Analysis

Cash flow from operating activities has been inconsistent, with a notable negative outflow of ₹72 crores in March 2022 but recovering to ₹55 crores in March 2024. Changes in working capital have contributed significantly to cash flow volatility, with large swings including a negative ₹119 crores in March 2022 and positive ₹39 crores in March 2023. Investing activities have generally involved outflows, consistent with capital expenditure, while financing activities have fluctuated between inflows and outflows, reflecting debt management and equity considerations.

Summary and Outlook

In summary, Gokul Refoils has exhibited solid revenue growth over the last several years, supported by expanding operations and asset base. Profitability has been uneven, impacted by rising costs and interest expenses, though recent years show signs of recovery. The company’s balance sheet reflects a cautious approach to debt, with a mix of long-term and short-term borrowings, while shareholder equity has steadily increased. Cash flow patterns suggest ongoing investment and working capital management challenges.

Investors analysing Gokul Refoils should consider both the growth potential and the margin pressures evident in recent financials. The company’s ability to manage costs and optimise capital structure will be key to sustaining profitability and enhancing shareholder value in the coming years.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →