Revenue and Profit Trends
Over the seven-year period ending March 2025, Mercantile Vent.'s net sales have shown a steady increase, rising from ₹34.40 crores in March 2019 to ₹72.19 crores in March 2025. This represents more than a doubling of revenue, reflecting the company's expanding operational scale. Total operating income mirrored this trend, with no other operating income reported during this period.
Operating profit before depreciation, interest, and tax (PBDIT) excluding other income has seen variability, peaking at ₹4.41 crores in March 2021 before declining to ₹1.36 crores in March 2025. However, when factoring in other income, which notably surged to ₹12.87 crores in March 2025, the overall operating profit (PBDIT) improved significantly to ₹14.23 crores, indicating the importance of non-operating income streams in the company's earnings profile.
Profit before tax (PBT) and profit after tax (PAT) have also exhibited fluctuations. The company recorded a loss before tax in March 2024 but rebounded strongly to a PBT of ₹13.09 crores in March 2025. Correspondingly, PAT rose to ₹16.27 crores in March 2025 from a negative figure the previous year. Consolidated net profit followed a similar pattern, with a dip in March 2024 but a recovery to ₹17.32 crores in March 2025.
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Cost Structure and Margins
The company's expenditure profile reveals rising employee costs and manufacturing expenses, which increased to ₹35.40 crores and ₹27.73 crores respectively by March 2025. Despite these rising costs, Mercantile Vent. managed to maintain a positive gross profit margin of 19.43% in March 2025, a recovery from a negative margin in the previous year. Operating profit margins excluding other income, however, remain modest at 1.88% in March 2025, down from double-digit levels in earlier years.
Tax expenses have varied, with a tax credit recorded in March 2025, contributing to the improved net profitability. The company has also experienced fluctuations in interest costs, which have generally declined over the period, supporting bottom-line growth.
Balance Sheet and Asset Quality
Mercantile Vent.'s balance sheet reflects steady growth in shareholder's funds, rising from ₹271.36 crores in March 2020 to ₹330.77 crores in March 2025. The company maintains a debt-free position in recent years, with no long-term or short-term borrowings reported in the latest fiscal year. Deferred tax assets have increased, indicating potential future tax benefits.
On the asset side, net block values have grown moderately, reaching ₹94.47 crores in March 2025, while non-current investments have expanded significantly to ₹222.71 crores, suggesting a strategic allocation towards long-term assets. Current assets have decreased from a peak in March 2022 but remain substantial at ₹73.40 crores in March 2025, with cash and bank balances notably lower than the previous year.
Cash Flow and Liquidity
Cash flow analysis reveals volatility, with operating cash flows turning negative in March 2025 at ₹-32 crores, contrasting with positive inflows in prior years. Investing activities also show a net outflow in the latest year, reflecting ongoing capital deployment. Financing activities have been largely inactive recently, with no new borrowings or repayments recorded in the latest fiscal year. The net cash outflow of ₹-50 crores in March 2025 has resulted in a significant reduction in cash and cash equivalents to ₹7 crores.
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Summary and Outlook
Mercantile Vent. has experienced a mixed but generally positive historical performance, characterised by strong revenue growth and recovery in profitability after a challenging fiscal year in 2024. The company’s ability to generate significant other income has been a key factor in bolstering operating profits. Its balance sheet remains robust with no debt and growing reserves, although recent cash flow challenges warrant attention.
Investors should note the company's improving earnings per share, which rose to ₹1.55 in March 2025 from a negative figure the previous year, signalling a return to profitability. The book value per share has remained relatively stable, reflecting consistent net asset value. While operating margins have contracted compared to earlier years, the overall financial health and strategic investments suggest potential for future growth.
Given these factors, Mercantile Vent. appears to be navigating a turnaround phase with promising signs of recovery, though monitoring cash flow trends and cost management will be crucial for sustained performance.
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