How has been the historical performance of Morarka Finance?

Revenue and Profitability Trends

Morarka Finance's net sales have demonstrated considerable volatility over the past seven years. Starting from a modest ₹0.96 crore in March 2019, sales surged to ₹5.43 crore by March 2020, followed by a dip to ₹1.27 crore in March 2021. The subsequent years saw a recovery with sales peaking at ₹7.58 crore in March 2024 before declining to ₹2.50 crore in March 2025. Despite these fluctuations, the company maintained a strong operating profit margin, with figures consistently above 70%, reaching an impressive 93.8% in March 2024. The gross profit margin notably peaked at 126.8% in the latest fiscal year, reflecting efficient cost management and other income contributions.

Operating profit (PBDIT) excluding other income mirrored the sales trend, with a low of ₹0.54 crore in 2019 rising to ₹7.11 crore in 2024 before settling at ₹1.94 crore in 2025. The inclusion of other income in 2025 boosted operating profit to ₹3.17 crore, underscoring the importance of diversified income streams. Profit after tax (PAT) followed a similar pattern, with a peak of ₹6.32 crore in 2024 and a subsequent decline to ₹2.80 crore in 2025. The PAT margin remained robust, exceeding 80% in most years and reaching 112.0% in the latest fiscal year, indicating strong net profitability relative to revenue.

Balance Sheet and Asset Quality

The company's balance sheet reveals a steady increase in shareholder's funds, rising from ₹16.43 crore in 2020 to ₹95.29 crore in 2025. This growth is primarily driven by reserves, which expanded significantly from ₹11.93 crore in 2020 to ₹90.78 crore in 2025, reflecting accumulated retained earnings. Morarka Finance maintains a debt-free status throughout the period, with no long-term or short-term borrowings reported, underscoring a conservative capital structure.

On the asset side, current investments constitute the bulk of total assets, amounting to ₹95.23 crore in 2025, down from a peak of ₹269.00 crore in 2022. Non-current assets remain minimal, with net block values consistently below ₹0.10 crore, indicating limited fixed asset investment. The company's total assets decreased from ₹269.85 crore in 2022 to ₹96.19 crore in 2025, mirroring the reduction in current investments and overall scale of operations.

Cash Flow and Operational Efficiency

Cash flow analysis shows variability in operating cash flows, with a positive inflow of ₹3.00 crore in 2025 following a period of stagnation and negative flows in earlier years. Investing activities have contributed modest inflows, while financing activities reflect minor outflows, suggesting limited external financing and a focus on internal cash generation. The company’s cash and bank balances have remained low, consistent with its investment-heavy asset base.

Morarka Finance's earnings per share (EPS) have fluctuated in line with profitability, peaking at 14.04 in 2024 before declining to 6.22 in 2025. Book value per share also followed a downward trend from ₹598.23 in 2022 to ₹211.65 in 2025, reflecting the contraction in reserves and total equity.

Summary and Outlook

Overall, Morarka Finance has demonstrated a capacity to generate strong profitability margins despite a relatively small and fluctuating revenue base. The absence of debt and a growing reserve base provide a solid financial foundation, although the recent decline in sales and book value per share may warrant closer scrutiny by investors. The company’s focus on maintaining high operating margins and generating other income has helped sustain earnings through varying market conditions. Investors seeking exposure to this NBFC microcap should weigh the historical volatility against the firm’s conservative balance sheet and consistent profit generation.

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