Revenue and Profitability Trends
Over the past seven years, Mercury Labs’ net sales have shown a generally upward trend, rising from ₹55.52 crores in March 2019 to ₹75.10 crores in March 2025. The company experienced a notable jump in sales between March 2021 and March 2022, increasing from ₹68.60 crores to ₹57.92 crores, followed by stabilisation around the ₹75 crore mark in subsequent years. Despite minor fluctuations, the revenue base has remained relatively stable in the ₹75 crore range in the last three years.
Operating profit margins, excluding other income, have seen some contraction, moving from 13.98% in March 2021 to 9.35% in March 2025. This decline reflects rising costs, particularly in employee expenses which increased from ₹7.83 crores in 2019 to ₹16.84 crores in 2025, and other expenses which also rose steadily. Nevertheless, the company maintained positive operating profits, with PBDIT (including other income) ranging between ₹6.76 crores and ₹10.47 crores over the period.
Profit after tax (PAT) margins have mirrored this trend, peaking at 7.78% in March 2021 before declining to 4.18% in March 2025. Correspondingly, earnings per share (EPS) have fluctuated, reaching a high of 47.08 in March 2024 before settling at 26.17 in March 2025. These figures indicate some pressure on net profitability despite stable top-line performance.
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Asset and Liability Position
Mercury Labs’ total assets have grown steadily from ₹56.30 crores in March 2020 to ₹74.24 crores in March 2025, reflecting ongoing investments and capital accumulation. The net block of fixed assets remained relatively stable, hovering around ₹23-26 crores, while capital work in progress saw a significant increase to ₹9.32 crores in March 2025, suggesting expansion or upgrade initiatives.
Shareholders’ funds have shown consistent growth, rising from ₹31.98 crores in March 2020 to ₹53.57 crores in March 2025, supported by increasing reserves. The book value per share has appreciated accordingly, moving from ₹266.48 to ₹446.41 over the same period, indicating enhanced net worth per share.
On the liabilities side, total debt has decreased from ₹6.33 crores in March 2020 to ₹4.09 crores in March 2025, signalling a reduction in leverage. Long-term borrowings have also declined, while current liabilities have fluctuated but remained manageable. Contingent liabilities have increased somewhat but remain modest relative to total assets.
Cash Flow and Operational Efficiency
Cash flow from operating activities has varied, peaking at ₹8 crores in March 2021 and declining to ₹4 crores in March 2025. The company has consistently invested in its operations, with cash outflows from investing activities increasing to ₹9 crores in the latest year, reflecting capital expenditure commitments. Financing activities have generally seen outflows, indicating repayments or reduced borrowings.
Despite these cash flow pressures, Mercury Labs has maintained a positive net current asset position, which improved from ₹16.45 crores in March 2020 to ₹25 crores in March 2025, supporting liquidity and operational stability.
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Summary of Historical Performance
In summary, Mercury Labs has exhibited a stable revenue base with moderate growth over the last several years. Profitability margins have faced some compression, largely due to rising costs, yet the company has maintained positive earnings and a healthy balance sheet. The steady increase in shareholders’ funds and book value per share underscores a strengthening financial foundation. Meanwhile, prudent debt management and positive net current assets highlight operational resilience.
Cash flow dynamics reveal ongoing investment in growth and infrastructure, balanced by operational cash generation. While recent years show some decline in net cash inflows, the company’s overall financial health remains sound, positioning it well for future opportunities.
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