How has been the historical performance of Permanent Magnet?

Revenue and Operating Performance

For the fiscal year ending March 2025, Permanent Magnet reported net sales of ₹205.05 crores, marking a slight increase from ₹201.48 crores in the previous year. The absence of other operating income indicates that the company’s revenue is primarily derived from its core business activities. Raw material costs saw a marginal decline to ₹112.49 crores from ₹114.11 crores, suggesting improved procurement efficiency or favourable input pricing. However, other expenses rose notably to ₹50.33 crores from ₹43.84 crores, which contributed to a rise in total expenditure excluding depreciation to ₹174.61 crores from ₹167.13 crores.

Operating profit before depreciation, interest, and tax (PBDIT) excluding other income decreased to ₹30.44 crores from ₹34.35 crores, reflecting a contraction in operating margins from 17.05% to 14.85%. Including other income, operating profit stood at ₹34.60 crores, down from ₹38.80 crores the previous year. This decline highlights pressure on profitability despite stable revenue growth.

Profitability and Margins

Profit before tax declined significantly to ₹20.77 crores from ₹28.26 crores, impacted by higher depreciation charges which rose to ₹11.43 crores from ₹8.26 crores. Interest expenses remained relatively stable at ₹2.40 crores. The net profit after tax decreased to ₹15.75 crores from ₹20.20 crores, with the profit after tax margin contracting from 10.03% to 7.68%. Earnings per share (EPS) correspondingly fell to ₹18.31 from ₹23.49, reflecting the reduced bottom-line performance.

Despite these challenges, the company maintained a clean sheet with no extraordinary or exceptional items reported in either year, indicating that the results reflect ongoing operational realities rather than one-off events.

Balance Sheet and Financial Position

Permanent Magnet’s balance sheet shows a strengthening in shareholder’s funds, which increased to ₹144.04 crores from ₹129.85 crores, supported by reserves rising to ₹135.44 crores. The company’s total liabilities remained stable at around ₹191 crores. Notably, long-term borrowings decreased to ₹8.11 crores from ₹10.05 crores, signalling a reduction in leverage. Current liabilities also declined, contributing to a healthier financial structure.

On the asset side, gross block expanded significantly to ₹71.94 crores from ₹43.92 crores, reflecting capital expenditure and asset additions. Correspondingly, accumulated depreciation increased, resulting in a net block of ₹50.10 crores, up from ₹29.38 crores. Current assets decreased to ₹124.74 crores from ₹143.87 crores, largely due to a reduction in cash and bank balances from ₹40.32 crores to ₹19.28 crores, although inventories and receivables remained steady.

Cash Flow and Liquidity

Cash flow from operating activities improved markedly to ₹38 crores from ₹22 crores, driven by positive adjustments and working capital changes. However, investing activities reflected higher outflows at ₹28 crores, consistent with the increase in fixed assets. Financing activities showed a net outflow of ₹9 crores compared to a small inflow the previous year, indicating repayments or reduced borrowings. The net cash position remained stable with closing cash and cash equivalents at ₹5 crores, slightly above the previous year’s ₹4 crores.

Summary of Historical Performance

Overall, Permanent Magnet’s historical performance over the last fiscal year reflects a company navigating a challenging environment with stable revenue but squeezed profitability. The increase in capital assets and reduction in debt suggest a strategic focus on strengthening operational capacity and financial health. While margins have contracted, the company’s ability to generate positive operating cash flow and maintain a solid balance sheet provides a foundation for future growth.

Investors should weigh the modest decline in earnings against the company’s asset expansion and deleveraging efforts. The stable equity base and improved reserves also indicate resilience. However, the dip in profit margins and EPS highlights the need for careful monitoring of cost controls and market conditions going forward.

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