Revenue and Profitability Trends
Over the four-year period ending March 2025, Modi Naturals’ net sales exhibited a strong upward movement, surging from ₹474.30 crores in March 2022 to ₹662.91 crores in March 2025. This represents a robust increase of nearly 40% over three years, reflecting the company’s expanding market presence and operational scale. However, the intermediate years showed some volatility, with sales dipping slightly in March 2023 before rebounding sharply in the latest fiscal.
Operating profit margins, excluding other income, have mirrored this volatility. The margin contracted from 3.13% in March 2022 to a low of 1.25% in March 2023, before recovering to 8.45% in March 2025. This rebound indicates improved cost management and operational efficiency. Correspondingly, the consolidated net profit swung from a healthy ₹9.37 crores in March 2022 to a marginal profit in March 2023, followed by a loss in March 2024, and then a strong recovery to ₹31.03 crores in March 2025. The earnings per share (EPS) followed a similar pattern, rising to 23.31 in the latest year after a negative EPS in the prior year.
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Cost Structure and Margins
The company’s raw material costs have scaled in line with revenue growth, rising from ₹380.76 crores in March 2022 to ₹503.88 crores in March 2025. Despite this increase, Modi Naturals managed to improve its operating profit margin significantly in the latest year, suggesting better pricing power or cost control. Employee costs also increased steadily, reflecting possible workforce expansion or wage inflation, while other expenses remained relatively stable around ₹60-65 crores annually.
Interest expenses have risen from ₹1.81 crores in March 2022 to ₹11.70 crores in March 2025, indicating higher borrowings or increased cost of debt. Despite this, the company’s profit before tax turned positive and substantial in the latest year, underscoring operational improvements outweighing financing costs.
Balance Sheet and Financial Position
Modi Naturals’ balance sheet has strengthened over the years, with shareholder’s funds increasing from ₹77.20 crores in March 2022 to ₹121.55 crores in March 2025. Total reserves have also grown steadily, supporting the company’s equity base. The book value per share rose from ₹61 in March 2022 to ₹91.35 in March 2025, reflecting enhanced net asset value per share.
Total liabilities have expanded from ₹165.24 crores in March 2022 to ₹329.78 crores in March 2025, driven largely by an increase in both long-term and short-term borrowings. Long-term borrowings surged significantly, indicating possible capital expenditure or expansion funding. The company’s net block of fixed assets also increased markedly, suggesting ongoing investments in property, plant, and equipment.
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Cash Flow and Liquidity
Cash flow from operating activities has been inconsistent, with negative cash flows recorded in March 2022, 2023, and 2024, before signs of stabilisation. Investing activities have consistently shown cash outflows, reflecting ongoing capital expenditure and asset acquisitions. Financing activities have provided positive inflows in recent years, likely supporting the company’s expansion and working capital needs.
Closing cash and bank balances have fluctuated but remain modest relative to total assets, indicating a focus on utilising cash for growth and operations rather than holding large cash reserves.
Summary
In summary, Modi Naturals has experienced a period of growth punctuated by operational challenges and margin pressures, followed by a strong recovery in the latest fiscal year. The company’s expanding revenue base, improved profitability, and strengthened equity position are positive indicators. However, rising borrowings and fluctuating cash flows warrant close monitoring. Investors should weigh these factors carefully when considering Modi Naturals’ stock for their portfolios.
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