How has been the historical performance of Kwality Pharma?

Revenue and Profit Trends

Kwality Pharma's net sales have shown considerable variation, peaking notably in the fiscal year ending March 2022 at ₹456.19 crores before moderating to ₹370.20 crores in March 2025. This peak was preceded by a steady rise from ₹139.30 crores in March 2020, reflecting a strong recovery and expansion phase. The total operating income mirrored this pattern, with no other operating income reported across the years.

Operating profit (PBDIT) excluding other income surged to ₹171.67 crores in March 2022, a significant jump from ₹14.19 crores in March 2020, before settling at ₹80.39 crores in March 2025. The operating profit margin excluding other income peaked at 37.63% in March 2022, indicating a period of exceptional operational efficiency, though it moderated to 21.72% by March 2025. Profit after tax followed a similar trend, reaching a high of ₹119.94 crores in March 2022 and standing at ₹39.80 crores in March 2025, with the PAT margin reflecting this movement, peaking at 26.29% and later adjusting to 10.75%.

Cost Structure and Margins

The company's raw material costs have generally increased in line with sales growth, reaching ₹165.41 crores in March 2025 from ₹91.92 crores in March 2020. Employee costs have also risen steadily, reflecting expansion and possibly increased workforce or wage inflation, standing at ₹43.78 crores in March 2025 compared to ₹11.93 crores in March 2020. Other expenses have more than doubled over the same period, indicating higher operational activities or inflationary pressures.

Despite these rising costs, Kwality Pharma has maintained a healthy gross profit margin, which stood at 19.57% in March 2025, up from 8.44% in March 2019, demonstrating improved cost management and pricing power over time.

Balance Sheet and Financial Position

The company’s total assets have expanded significantly, from ₹132.49 crores in March 2020 to ₹445.66 crores in March 2025, driven by growth in both fixed assets and current assets. Net block of assets increased from ₹42.69 crores to ₹145.69 crores over the same period, signalling ongoing capital investments. Current assets also rose substantially, with inventories and sundry debtors increasing in line with business scale.

Shareholders’ funds have grown robustly, reaching ₹264.05 crores in March 2025 from ₹46.01 crores in March 2020, supported by rising reserves. The book value per share has improved markedly, reflecting enhanced net worth and retained earnings accumulation.

On the liabilities side, total debt has increased from ₹31.42 crores in March 2020 to ₹112.45 crores in March 2025, indicating higher leverage to support growth. However, the company appears to have managed its debt prudently, with interest costs rising moderately and no exceptional items reported in the latest years.

Cash Flow and Liquidity

Kwality Pharma’s cash flow from operating activities has shown consistent improvement, rising from ₹6 crores in March 2020 to ₹52 crores in March 2025. This reflects stronger earnings quality and effective working capital management despite some fluctuations in changes in working capital. Cash flow from investing activities has been negative throughout, indicative of ongoing capital expenditure and investments in growth initiatives.

Financing activities have varied, with outflows in recent years suggesting debt repayments or dividend payments. The company’s closing cash and cash equivalents have increased to ₹12 crores in March 2025, providing a reasonable liquidity buffer.

Overall, Kwality Pharma’s historical performance reveals a company that has grown substantially in scale and profitability, while managing its costs and capital structure with increasing sophistication. The financial metrics suggest a business that has navigated market challenges and invested in its future capacity, positioning itself for continued operational strength.

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