How has been the historical performance of Nitta Gelatin?

Revenue and Profit Trends

Over the past seven years, Nitta Gelatin’s net sales have shown a general upward trend, rising from ₹303 crores in the fiscal year ending March 2019 to ₹526.57 crores by March 2025. While there was a slight dip in sales in the most recent year compared to the previous fiscal, the overall trajectory reflects steady expansion. The company’s operating profit margin, excluding other income, improved significantly from 9.76% in 2019 to nearly 20% in 2025, indicating enhanced operational efficiency and cost control.

Profit after tax (PAT) has seen a remarkable increase, growing from ₹4.92 crores in 2019 to ₹84.77 crores in 2025. This surge is also reflected in the earnings per share (EPS), which rose from ₹3.82 to ₹92.44 over the same period. The PAT margin improved from a modest 1.62% to a healthy 16.1%, underscoring the company’s ability to convert sales into net earnings effectively.

Cost Structure and Margins

The company’s raw material costs have increased in line with sales growth, rising from ₹130.15 crores in 2019 to ₹244.12 crores in 2025. However, the proportionate increase in other expenses and employee costs has been managed effectively, allowing the operating profit to expand. Other expenses have remained relatively stable, hovering around ₹100 to ₹130 crores annually, while employee costs have increased moderately, reflecting investment in human capital.

Interest expenses have declined significantly from ₹8.17 crores in 2019 to under ₹1 crore in 2025, indicating a reduction in debt servicing costs. This reduction has positively impacted the company’s gross profit and net profitability.

Balance Sheet Strength and Asset Management

Nitta Gelatin’s shareholder funds have grown substantially from ₹173 crores in 2021 to ₹422 crores in 2025, reflecting retained earnings and capital accumulation. The company’s total liabilities have increased but at a controlled pace, with total debt reducing from a peak of ₹80.95 crores in 2022 to ₹30.67 crores in 2025. This deleveraging trend enhances financial stability and reduces risk.

On the asset side, net block values have remained steady, indicating consistent investment in fixed assets. Current assets have expanded notably, particularly cash and bank balances, which surged from ₹2.67 crores in 2021 to ₹139 crores in 2025, providing ample liquidity. Inventories and sundry debtors have also increased in line with business growth, maintaining operational continuity.

Cash Flow and Financial Health

Cash flow from operating activities has shown a positive trend, increasing from ₹18 crores in 2021 to ₹75 crores in 2025. Despite some fluctuations in investing and financing activities, the company has maintained a net positive cash inflow, with closing cash and cash equivalents rising significantly to ₹111 crores in 2025 from negligible levels in earlier years. This strong cash position supports ongoing operations and potential expansion plans.

Book value per share has appreciated impressively from ₹179.74 in 2021 to ₹453.86 in 2025, reflecting the company’s growing net worth and value creation for shareholders.

Conclusion

Overall, Nitta Gelatin’s historical performance reveals a company that has steadily improved its financial metrics across revenue, profitability, and balance sheet strength. The reduction in debt, improvement in margins, and robust cash flows position the company favourably for future growth. Investors may find the company’s consistent earnings growth and enhanced shareholder value compelling, although recent sales softness warrants monitoring.

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