How has been the historical performance of Mangalam Organic?

Revenue and Profitability Trends

Over the six-year period ending March 2025, Mangalam Organic’s net sales exhibited a general upward trend, rising from ₹374.52 crores in 2020 to ₹530.01 crores in 2025. The company’s total operating income mirrored this growth, reflecting consistent expansion in its core business activities. However, profitability has been more volatile. Operating profit before depreciation, interest, and tax (PBDIT) excluding other income peaked at ₹128.84 crores in 2021 but experienced a sharp decline to a negative figure in 2023 before recovering to ₹58.58 crores in 2025. This fluctuation was influenced by rising raw material costs and other expenses, which increased notably in recent years.

Profit after tax (PAT) followed a similar pattern, with a high of ₹84.88 crores in 2021, a significant loss in 2023, and a modest recovery to ₹12.60 crores in 2025. Correspondingly, the PAT margin contracted from 25.09% in 2021 to 2.38% in 2025, indicating tighter profitability despite higher revenues. Earnings per share (EPS) reflected these swings, peaking at 99.16 in 2021 before turning negative in 2023 and rebounding to 14.72 in 2025.

Cost Structure and Margins

The company’s raw material costs have been a significant component of total expenditure, rising from ₹209.70 crores in 2020 to ₹312.47 crores in 2025. Other expenses also increased substantially, reaching ₹156.41 crores in 2025 from ₹53.70 crores in 2020. Despite these cost pressures, Mangalam Organic managed to improve its operating profit margin from a negative margin in 2023 to 11.05% in 2025, though this remains below the highs of previous years. Gross profit margin similarly recovered to 7.06% in 2025 after a dip in 2023.

Balance Sheet and Financial Position

On the balance sheet front, shareholder’s funds grew steadily from ₹251.67 crores in 2021 to ₹293.21 crores in 2025, supported by rising reserves. The company’s total liabilities increased significantly, reaching ₹623.60 crores in 2025 from ₹311.30 crores in 2021, largely due to a sharp rise in short-term borrowings which surged to ₹233.68 crores in 2025. Long-term borrowings fluctuated but remained elevated compared to earlier years. Total assets expanded in line with liabilities, reflecting investments in gross block and capital work in progress, which rose to ₹427.47 crores and ₹26.13 crores respectively by 2025.

Cash Flow Dynamics

Cash flow from operating activities showed variability, with a negative outflow of ₹7 crores in 2025 contrasting with positive inflows in prior years. Investing activities consistently reflected cash outflows, indicative of ongoing capital expenditure. Financing activities in 2025 generated ₹73 crores, suggesting reliance on external funding to support growth and working capital needs. The company’s cash and bank balances remained low, signalling tight liquidity management.

Summary of Historical Performance

In summary, Mangalam Organic’s historical performance reveals a company that has expanded its revenue base substantially over the past five years, yet has faced challenges in maintaining consistent profitability. The sharp profit decline in 2023 stands out as an anomaly amid otherwise positive trends. The company’s balance sheet shows increased leverage, particularly in short-term borrowings, which may warrant close monitoring. Capital investments have been robust, supporting future growth potential, but cash flow volatility highlights the need for prudent financial management.

Investors analysing Mangalam Organic should weigh the company’s growth in sales and asset base against the pressures on margins and profitability. The recovery in operating profit and net profit in the latest fiscal year suggests resilience, but the historical fluctuations underline the importance of cautious optimism when considering this stock for long-term investment.

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