Revenue and Profit Trends
The company’s net sales have shown notable volatility, with a peak in the fiscal year ending March 2018, followed by a dip and a recovery culminating in a substantial increase by March 2023. Net sales rose from ₹138.40 crores in March 2021 to ₹267.49 crores in March 2023, reflecting a strong rebound and expansion in business activity. Operating profit before other income (PBDIT excl OI) also improved steadily, reaching ₹18.72 crores in March 2023 from ₹17.63 crores in March 2021, despite some margin compression compared to earlier years.
Profit after tax (PAT) followed a similar upward trend, increasing from ₹6.07 crores in March 2021 to ₹8.44 crores in March 2023. However, the PAT margin has seen a decline from 4.39% in March 2021 to 3.16% in March 2023, indicating rising costs or pricing pressures impacting net profitability. Earnings per share (EPS) showed variability, with a peak in March 2022 at ₹6.86 before settling at ₹5.49 in March 2023, influenced by changes in equity capital and profit levels.
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Cost Structure and Margins
Raw material costs have risen in line with sales, reaching ₹149.43 crores in March 2023 from ₹67.33 crores in March 2021, reflecting increased production volumes and input prices. Other expenses have also escalated significantly, from ₹37.41 crores in March 2021 to ₹90.95 crores in March 2023, which has contributed to the compression in operating margins. Employee costs have increased moderately, indicating controlled labour expenses relative to revenue growth.
The operating profit margin excluding other income declined from 12.74% in March 2021 to 7.0% in March 2023, while the gross profit margin followed a similar pattern, dropping from 12.42% to 7.2% over the same period. This suggests that while the company has expanded its top line, it faces challenges in maintaining cost efficiencies and pricing power.
Balance Sheet and Financial Position
Mahalaxmi Rubtec’s total assets have grown steadily from ₹167.63 crores in March 2018 to ₹210.38 crores in March 2023, supported by increases in both non-current and current assets. Net block of fixed assets remained relatively stable, indicating limited new capital expenditure in recent years. Inventories and sundry debtors have increased, consistent with higher sales volumes.
On the liabilities side, total debt rose from ₹33.55 crores in March 2018 to ₹55.85 crores in March 2023, with a notable increase in short-term borrowings. Shareholders’ funds have also expanded, reaching ₹87.32 crores in March 2023, reflecting accumulated reserves and retained earnings. The company’s book value per share has improved from ₹42.09 in March 2018 to ₹56.79 in March 2023, signalling enhanced net worth per share despite fluctuations in equity capital.
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Cash Flow and Liquidity
Cash flow from operating activities has shown variability, peaking at ₹23 crores in March 2020 before moderating to ₹6 crores in March 2023. The company has experienced negative cash flow from investing activities in most years, reflecting ongoing investments or asset acquisitions. Financing activities have fluctuated, with a net outflow of ₹6 crores in March 2023, indicating repayments or reduced borrowings.
Closing cash and cash equivalents have varied widely, with a low of ₹1 crore in March 2022 and a recovery to ₹10 crores in March 2023, suggesting improved liquidity management recently. Changes in working capital have generally been negative in recent years, indicating increased investment in current assets relative to liabilities.
Summary
Overall, Mahalaxmi Rubtec’s historical performance reflects a company that has expanded its revenue base substantially over six years, albeit with some margin pressures and rising costs. The balance sheet shows growth in assets and equity, supported by increased borrowings, particularly short-term debt. Cash flow patterns indicate active investment and financing management, with recent improvements in liquidity. Investors should weigh the company’s growth prospects against the challenges in maintaining profitability and managing working capital efficiently.
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