How has been the historical performance of Mahindra EPC?

Revenue and Operating Performance Trends

Over the past seven years, Mahindra EPC’s net sales have shown variability, with a peak of nearly ₹284 crores in fiscal 2020, followed by a decline to around ₹210 crores in 2023. The latest fiscal year, 2025, saw a recovery to ₹273 crores, indicating a rebound in business activity. Total operating income mirrored this pattern, as other operating income remained negligible throughout the period.

Raw material costs have consistently represented a significant portion of expenses, fluctuating between ₹124 crores and ₹137 crores, reflecting the company’s exposure to input price volatility. Employee costs have steadily increased from ₹25 crores in 2019 to nearly ₹32 crores in 2025, signalling investment in human capital despite operational challenges.

Other expenses have also risen notably, reaching over ₹101 crores in the latest fiscal year, which has impacted overall expenditure. Despite these cost pressures, the company managed to improve its operating profit (PBDIT) from a loss in 2023 to a positive ₹16.35 crores in 2025, supported by other income contributions.

Profitability and Margins

Profit before tax (PBT) has reflected the company’s cyclical performance, with losses recorded in 2022 and 2023, followed by a return to profitability in 2024 and 2025. The profit after tax (PAT) similarly swung from a loss of over ₹12 crores in 2023 to a positive ₹7.21 crores in 2025. Earnings per share (EPS) followed this trend, recovering from negative values to ₹2.58 in the latest year.

Operating profit margins excluding other income improved to 5.11% in 2025, up from a negative margin in 2023, while PAT margins rose to 2.64%, signalling a cautious but positive turnaround in operational efficiency and bottom-line results.

Interest expenses have remained relatively stable, averaging around ₹2 crores annually, indicating manageable financing costs. Depreciation charges have been consistent, reflecting steady asset utilisation.

Balance Sheet and Asset Quality

Mahindra EPC’s balance sheet reveals a stable equity base, with shareholder funds increasing modestly to ₹172.61 crores in 2025. The company has maintained a debt-free position in recent years, with short-term borrowings fluctuating but no long-term debt recorded, enhancing financial flexibility.

Non-current assets have declined from ₹68 crores in 2022 to ₹31 crores in 2025, while current assets have grown to nearly ₹252 crores, driven by increases in sundry debtors and inventories. Net current assets have improved to ₹134 crores, supporting working capital needs effectively.

Contingent liabilities have risen to ₹47 crores in 2025, which investors should monitor as a potential risk factor. The book value per share has remained relatively stable, reflecting consistent net asset value despite earnings volatility.

Cash Flow and Liquidity Position

Cash flow from operating activities has been inconsistent, with positive inflows in some years and negative in others, reflecting the company’s fluctuating profitability and working capital management. The latest fiscal year showed a modest operating cash flow of ₹1 crore, indicating cautious liquidity management.

Investing activities have generally resulted in cash outflows, consistent with capital expenditure and asset maintenance. Financing activities have varied, with repayments and borrowings impacting net cash flows. The closing cash and cash equivalents stood at ₹3.79 crores in 2025, a slight improvement over previous years but still modest relative to total assets.

Overall, Mahindra EPC’s historical performance depicts a company navigating cyclical industry challenges with signs of recovery in recent years. Investors should weigh the improving profitability and stable balance sheet against the volatility experienced in prior periods.

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