How has been the historical performance of Meghna Infracon?

Revenue and Operating Income Trends

In the fiscal year ending March 2025, Meghna Infracon reported total operating income of ₹39.88 crores, down from ₹53.52 crores in the previous year. This decline was primarily driven by a sharp reduction in the purchase of finished goods, which fell from ₹40.85 crores to ₹1.71 crores. Other components such as raw material costs and power expenses remained negligible or unchanged. Despite the lower top-line figure, the company managed to control other expenditure categories effectively.

Cost Structure and Profitability

The total expenditure excluding depreciation decreased substantially from ₹52.10 crores to ₹28.85 crores. However, manufacturing expenses rose significantly to ₹15.20 crores from ₹0.46 crores, indicating increased production activity or investment in operational capabilities. Employee costs and other expenses also saw moderate increases. These cost dynamics contributed to a remarkable improvement in operating profit (PBDIT), which surged to ₹11.38 crores from ₹3.57 crores the previous year.

Profitability Margins and Earnings

Meghna Infracon's operating profit margin excluding other income improved dramatically to 27.66% from a mere 2.65% in the prior year. The gross profit margin also expanded to 27.76% compared to 6.2%. These margin enhancements translated into a profit before tax of ₹11.20 crores, a significant rise from ₹3.26 crores. After accounting for taxes, the profit after tax stood at ₹9.79 crores, more than triple the previous year's ₹3.18 crores. Consolidated net profit rose to ₹9.24 crores from ₹1.49 crores, reflecting strong bottom-line growth. Earnings per share (EPS) increased to ₹4.25 from ₹1.37, signalling improved shareholder returns.

Balance Sheet and Financial Position

The company’s shareholder funds strengthened to ₹21.96 crores from ₹13.20 crores, supported by an increase in reserves despite a negative reserve figure reported in the latest year. Total liabilities rose to ₹34.91 crores from ₹21.27 crores, with current liabilities increasing notably. Meghna Infracon maintained a debt-free status with no long-term or short-term borrowings reported in either year. Asset-wise, net block increased to ₹0.97 crores from ₹0.11 crores, indicating capital investments. Inventories and sundry debtors also rose, reflecting operational scale changes. The book value per share improved to ₹10.11 from ₹6.075, underscoring enhanced net asset value per share.

Cash Flow and Liquidity

Cash flow from operating activities was robust at ₹18 crores, supported by positive changes in working capital. Investing activities showed a modest outflow of ₹1 crore, while financing activities recorded an outflow of ₹16 crores. The net cash inflow/outflow was neutral, with closing cash and cash equivalents reported as zero. This suggests the company managed its liquidity prudently during the year.

Summary of Historical Performance

Overall, Meghna Infracon has exhibited a marked improvement in profitability and operational efficiency in the latest fiscal year despite a contraction in revenue. The company’s ability to reduce expenditure and enhance margins has driven a substantial increase in net profit and earnings per share. The balance sheet reflects a stronger equity base and prudent financial management with zero debt. While the decline in sales warrants attention, the improved profit margins and cash flow generation indicate a positive trajectory for the company’s financial health.

Investor Considerations

Investors analysing Meghna Infracon should weigh the recent profitability gains against the backdrop of reduced sales and rising liabilities. The company’s enhanced margins and earnings growth are encouraging, but monitoring future revenue trends and working capital management will be crucial. The absence of debt provides financial flexibility, which could support growth initiatives or buffer against market volatility. The improved book value per share also adds to shareholder value considerations.

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