How has been the historical performance of Madhav Infra?

Revenue and Profitability Trends

Over the past six years, Madhav Infra’s net sales have shown a notable increase, rising from ₹203.53 crores in March 2020 to ₹610.24 crores in March 2025. This growth reflects the company’s expanding operations and market presence. The total operating income followed a similar pattern, reaching ₹610.24 crores in the latest fiscal year. Despite some volatility, the company managed to improve its operating profit (PBDIT) from ₹34.92 crores in March 2021 to ₹66.84 crores in March 2025, indicating better operational efficiency and cost management.

Profit after tax (PAT) also recovered strongly after a loss in March 2021, climbing to ₹24.47 crores in March 2025. The PAT margin, although modest at 4.08% in the latest year, has improved from a negative margin of -4.37% in 2021, signalling a return to profitability. Earnings per share (EPS) followed this trend, rising from a negative figure in 2021 to 0.96 in March 2025, reflecting enhanced shareholder value.

Cost Structure and Margins

The company’s raw material costs have increased substantially in line with revenue growth, reaching ₹417.61 crores in March 2025 from ₹83.73 crores in March 2020. Manufacturing expenses also rose but showed a decline in the latest year compared to previous peaks, suggesting improved cost control. Employee costs have remained relatively stable, while other expenses have seen a gradual increase consistent with business expansion.

Operating profit margins excluding other income have fluctuated, peaking at over 22% in 2020 but settling at around 11% in recent years. Gross profit margins have similarly varied, reflecting the impact of raw material and manufacturing costs on profitability. Despite these fluctuations, the company has maintained a positive gross profit margin of 7.4% in the latest fiscal year.

Balance Sheet and Financial Position

Madhav Infra’s total assets have grown steadily from ₹495.46 crores in March 2020 to ₹645.70 crores in March 2025, supported by increases in both current and non-current assets. Shareholders’ funds have also expanded, reaching ₹212.83 crores in the latest year, up from ₹141.72 crores in 2020, indicating strengthening equity base.

However, the company’s total debt remains significant, with total borrowings around ₹160 crores in March 2025, slightly down from previous years but still a considerable liability. Long-term borrowings have decreased from ₹185 crores in 2020 to ₹95 crores in 2025, reflecting efforts to reduce leverage. Current liabilities have increased, driven by higher trade payables and other current obligations, which may warrant close monitoring.

Cash Flow and Liquidity

Cash flow from operating activities has improved markedly, reaching ₹124 crores in March 2025 compared to ₹1 crore in 2020, demonstrating enhanced cash generation capability. Investing activities have seen increased outflows recently, consistent with capital expenditure and growth initiatives. Financing activities have generally involved outflows, reflecting debt repayments and other financing adjustments.

The company’s closing cash and cash equivalents have risen to ₹32 crores in March 2025 from ₹24 crores in 2020, supporting liquidity. Net cash inflow in the latest year was ₹23 crores, a positive turnaround from negative cash flows in prior years.

Outlook and Considerations

Madhav Infra’s historical performance reveals a company that has navigated through periods of volatility and losses to achieve growth in sales, profitability, and equity. While margins have compressed compared to earlier highs, the firm’s ability to generate positive cash flows and reduce long-term debt is encouraging. Investors should weigh the company’s improving fundamentals against its elevated current liabilities and moderate profit margins when considering future prospects.

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