Revenue and Profitability Trends
The company’s net sales surged impressively from a modest ₹2.41 crore in March 2023 to ₹555.43 crore in March 2024, and further to ₹889.63 crore by March 2025. This exponential growth reflects a rapid scaling of operations and market presence. Total operating income mirrored this trend, with no other operating income reported during these years.
Despite the substantial increase in revenue, operating profit margins have contracted sharply. The operating profit margin excluding other income declined from a robust 69.7% in March 2023 to 13.6% in March 2024, and further to 6.3% in March 2025. Similarly, the profit after tax (PAT) margin fell from 57.7% to 13.2% and then to 5.9% over the same period. This margin compression suggests rising costs and expenses accompanying the rapid expansion.
Profit after tax rose from ₹1.39 crore in March 2023 to ₹73.25 crore in March 2024, before easing to ₹52.37 crore in March 2025. The earnings per share (EPS) showed volatility, with a peak of 1.6 in March 2024 and a decline to 0.38 in March 2025, reflecting the impact of increased equity capital and diluted earnings.
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Cost Structure and Expenses
The company’s expenditure profile evolved significantly. In March 2024, raw material costs were ₹289.44 crore, but this figure was absent in March 2025, replaced by a substantial purchase of finished goods amounting to ₹799.45 crore. This shift indicates a possible change in procurement or production strategy. Employee costs increased from negligible levels to ₹5.23 crore by March 2025, while other expenses also rose moderately.
Total expenditure excluding depreciation rose from ₹0.73 crore in March 2023 to ₹479.91 crore in March 2024, and further to ₹833.38 crore in March 2025, reflecting the scale of operations and associated costs.
Balance Sheet and Financial Position
Guj. Toolroom’s balance sheet expanded considerably. Share capital increased sharply from ₹5.56 crore in March 2023 and 2024 to ₹139.24 crore in March 2025, accompanied by reserves growing from ₹0.80 crore to ₹183.95 crore over the same period. Consequently, shareholder’s funds surged from ₹79.60 crore in March 2024 to ₹323.19 crore in March 2025.
Total liabilities more than doubled from ₹491.43 crore in March 2024 to ₹1,055.89 crore in March 2025, driven by a rise in trade payables and current liabilities. Short-term borrowings also increased notably, indicating higher working capital requirements.
On the asset side, current assets more than doubled to ₹1,054.96 crore in March 2025, supported by a significant increase in sundry debtors and short-term loans and advances. Inventories decreased slightly, while cash and bank balances remained stable around ₹8 crore.
Cash Flow Dynamics
The company’s cash flow from operating activities turned negative in March 2025, recording an outflow of ₹257 crore compared to a positive inflow of ₹10 crore in March 2024. This was primarily due to a sharp increase in working capital requirements, with changes in working capital amounting to a negative ₹309 crore. Financing activities provided a corresponding inflow of ₹257 crore, balancing the cash position. Investing activities remained largely neutral.
Despite the operational cash outflow, the closing cash and cash equivalents remained steady at ₹8 crore, reflecting effective cash management amid expansion.
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Summary and Outlook
Over the last three years, Guj. Toolroom has transitioned from a very small base to a significantly larger enterprise, with impressive revenue growth and increased profitability in absolute terms. However, the company faces margin pressures and rising costs, which have compressed profitability ratios. The balance sheet expansion and increased borrowings highlight the capital-intensive nature of its growth phase, with working capital management emerging as a key challenge.
Investors should weigh the company’s rapid scaling and improved earnings against the margin contraction and cash flow pressures. The evolving cost structure and increased financial leverage warrant close monitoring as Guj. Toolroom continues to consolidate its market position.
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