How has been the historical performance of Indag Rubber?

Revenue and Profit Trends

Indag Rubber's net sales have experienced variability, peaking at ₹251.18 crores in March 2024 before declining to ₹228.42 crores in March 2025. Earlier years showed a gradual increase from ₹172.01 crores in March 2018 to ₹186.77 crores in March 2020, followed by a dip and recovery pattern. Despite these fluctuations, the company maintained a consistent stream of operating income solely from sales, with no other operating income reported during this period.

Operating profit excluding other income saw a significant drop in the latest fiscal year to ₹1.75 crores from ₹16.57 crores the previous year, reflecting a sharp contraction in core operational efficiency. However, other income contributed ₹11.81 crores in March 2025, cushioning the overall operating profit (PBDIT) to ₹13.56 crores. This contrasts with a peak operating profit of ₹26.45 crores in March 2024.

Profit before tax declined markedly to ₹5.96 crores in March 2025 from ₹20.45 crores in the prior year, with profit after tax following a similar trend, falling to ₹4.72 crores. Consolidated net profit also decreased to ₹6.53 crores in March 2025 from ₹16.15 crores in March 2024. Earnings per share mirrored this pattern, dropping to ₹2.49 from ₹6.15 over the same period.

Cost Structure and Margins

The company's raw material costs have generally risen in line with sales, reaching ₹159.38 crores in March 2025. Employee costs have also increased steadily, reflecting possible expansion or wage inflation, standing at ₹28.39 crores in the latest fiscal year. Other expenses remain significant, though they decreased from ₹40.28 crores in March 2024 to ₹33.87 crores in March 2025.

Operating profit margins excluding other income have contracted sharply to 0.77% in March 2025 from 6.6% the previous year, indicating tighter operational profitability. Gross profit margin also declined to 5.5% from 10.25%. The profit after tax margin followed suit, dropping to 2.07% from 6.2%, signalling pressure on bottom-line profitability.

Balance Sheet and Financial Position

Indag Rubber's shareholder funds have grown modestly over the years, reaching ₹227.60 crores in March 2025. The company has successfully reduced its long-term borrowings to zero by March 2025, down from ₹9.91 crores in March 2020, reflecting a stronger balance sheet and reduced financial leverage. Total liabilities have increased slightly to ₹274.43 crores in March 2025 from ₹271.44 crores the previous year.

On the asset side, net block values have decreased from ₹43.57 crores in March 2019 to ₹33 crores in March 2025, while capital work in progress has been minimal in recent years. Non-current investments have increased steadily, reaching ₹115.65 crores in March 2025, indicating a possible strategic allocation of surplus funds.

Current assets have also grown, with total current assets at ₹115.03 crores in March 2025, supported by increased current investments and inventories. Net current assets improved to ₹84.89 crores, suggesting healthy short-term liquidity.

Cash Flow Analysis

Cash flow from operating activities has shown resilience, with ₹17 crores generated in March 2024, though data for March 2025 is not available. Investing activities have generally been negative, reflecting ongoing capital expenditure or investments, while financing activities have consistently been outflows, indicating debt repayments or dividend payments. The net cash inflow was modest at ₹2 crores in March 2024, with closing cash and cash equivalents at ₹4 crores.

Summary and Outlook

Over the past seven years, Indag Rubber has demonstrated a mixed financial performance characterised by fluctuating revenues and profitability. The company’s ability to reduce debt and maintain a solid equity base is a positive sign, while the decline in operating margins and net profit in the most recent fiscal year warrants close attention. Investors should consider these trends alongside sector dynamics and peer performance when evaluating Indag Rubber’s prospects.

With earnings per share and profit margins under pressure recently, the company’s focus on cost control and operational efficiency will be critical to restoring growth momentum. The steady increase in non-current investments and current assets suggests a strategic approach to asset management, which could support future expansion or diversification.

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