How has been the historical performance of Indbank Merchant?

Revenue and Profitability Trends

Indbank Merchant’s net sales have shown a robust upward trajectory, rising from ₹8.12 crores in March 2019 to ₹26.78 crores by March 2025. This growth reflects a compound expansion in the company’s core business activities, with total operating income mirroring this trend as other operating income remained negligible throughout the period. The company’s operating profit margin, excluding other income, improved significantly from negative margins in earlier years to a strong 44.47% in the latest fiscal year, underscoring enhanced operational efficiency.

Operating profit (PBDIT) excluding other income surged from a loss of ₹1.06 crores in 2019 to a positive ₹11.91 crores in 2025, while the overall operating profit including other income reached ₹11.94 crores. Profit before tax followed a similar pattern, increasing from ₹1.81 crores in 2019 to ₹11.50 crores in 2025. Correspondingly, profit after tax rose from ₹1.77 crores to ₹8.46 crores, with the PAT margin stabilising around 31.59% in the latest year, indicating strong bottom-line growth.

Cost Structure and Expense Management

The company’s total expenditure, excluding depreciation, increased from ₹9.18 crores in 2019 to ₹14.87 crores in 2025, reflecting the scale of operations. Employee costs rose steadily from ₹4.38 crores to ₹8.98 crores, consistent with business expansion. Manufacturing expenses and other operating costs also increased but remained controlled relative to revenue growth. Notably, Indbank Merchant has maintained zero raw material and purchase costs, indicating a service-oriented or non-manufacturing business model.

Interest expenses have been minimal and declining, from ₹1.53 crores in 2019 to just ₹0.12 crores in 2025, reflecting prudent financial management and low leverage. Depreciation charges remained stable, indicating limited capital asset additions or steady asset utilisation.

Balance Sheet Strength and Asset Quality

Shareholders’ funds have grown consistently, from ₹64.28 crores in 2021 to ₹91.65 crores in 2025, supported by rising reserves. The company’s equity capital remained constant at ₹44.38 crores, with book value per share increasing from ₹13.57 in 2020 to ₹20.65 in 2025, signalling enhanced net asset value per share. Total liabilities rose moderately to ₹116.45 crores in 2025, with negligible long-term borrowings and minimal short-term debt, underscoring a conservative capital structure.

Current assets expanded significantly, reaching ₹98.87 crores in 2025, driven largely by cash and bank balances which surged from ₹35.32 crores in 2020 to ₹86.82 crores in 2025. Sundry debtors and current investments also increased, reflecting business growth and liquidity management. Net current assets improved markedly, indicating strong working capital health.

Cash Flow and Financial Stability

Cash flow from operating activities has fluctuated, with negative cash flows in some years but a general trend towards stabilisation. The company experienced a net cash inflow in earlier years but faced minor outflows in recent periods. Investing activities have involved modest outflows, while financing activities remained largely inactive, consistent with the company’s low debt profile. Closing cash and cash equivalents showed a decline in recent years but remained positive, supporting liquidity.

Summary of Historical Performance

Over the seven-year period analysed, Indbank Merchant has transformed from a company with negative operating margins and modest profits to a financially robust entity with strong revenue growth and profitability. The company’s ability to increase net sales more than threefold, while improving operating and net profit margins, highlights effective management and operational scaling. The balance sheet reflects a solid equity base, minimal debt, and ample liquidity, positioning the company well for future growth opportunities.

Despite some fluctuations in cash flow, the overall financial health remains sound, supported by consistent earnings per share growth and rising book value. Investors may view Indbank Merchant as a stable and improving business, though ongoing monitoring of cash flow trends and expense management will be important to sustain this positive trajectory.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →