Revenue and Operating Performance Trends
Examining the company's net sales reveals significant volatility. The fiscal year ending March 2020 marked a peak with net sales reaching ₹15.62 crores, followed by a sharp decline to ₹0.27 crores in March 2023. The latest fiscal year, March 2025, saw a recovery to ₹10.46 crores. Other operating income has consistently remained negligible across the years, indicating the company’s reliance primarily on core sales activities.
Total operating income mirrored this trend, peaking in 2020 before dipping sharply and then partially rebounding. The absence of raw material and finished goods purchase costs suggests a business model not heavily reliant on inventory procurement. However, the company experienced fluctuations in stock levels, with an increase in stocks amounting to ₹1.78 crores in March 2025, contrasting with decreases in prior years.
Employee costs have shown a gradual increase from ₹0.44 crores in 2021 to ₹0.83 crores in 2025, reflecting possible expansion or wage inflation. Other expenses have also risen, reaching ₹1.72 crores in the latest fiscal year, which may impact overall profitability.
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Profitability and Margins
The company’s operating profit before depreciation, interest, and tax (PBDIT) excluding other income has shown a mixed picture. After a strong performance in 2020 with ₹6.27 crores, it recorded losses in the years 2021 through 2024, before rebounding to ₹6.13 crores in 2025. Including other income, operating profit improved, reaching ₹7.92 crores in 2025, indicating that non-operating income contributes meaningfully to earnings.
Interest expenses have remained stable at ₹0.14 crores annually, while depreciation has marginally decreased to ₹0.07 crores in 2025. Profit before tax (PBT) followed a similar pattern to operating profit, with a peak of ₹8.42 crores in 2020, a dip in subsequent years, and a recovery to ₹7.71 crores in 2025. Correspondingly, profit after tax (PAT) stood at ₹5.75 crores in 2025, down from ₹6.28 crores in 2020 but significantly higher than the sub-₹1 crore levels seen in 2022 and 2023.
Margins have been notably variable. The operating profit margin excluding other income was 58.6% in 2025, a strong recovery from negative margins in prior years. Gross profit margin also improved to 74.38% in 2025, while PAT margin was 54.97%, reflecting efficient cost management and profitability resurgence.
Balance Sheet and Financial Position
R J Shah & Co’s balance sheet reveals a steady increase in shareholder’s funds, rising from ₹30.42 crores in 2020 to ₹40.87 crores in 2025. Reserves have also grown consistently, supporting the company’s equity base. The company maintains a low debt profile, with total debt stable at ₹1.23 crores over the years, indicating a conservative leverage approach.
Non-current assets have increased substantially, primarily due to other non-current assets valued at over ₹31 crores in recent years, suggesting investments or long-term holdings. Net block of fixed assets has declined slightly from ₹0.92 crores in 2020 to ₹0.73 crores in 2025, reflecting depreciation and limited capital expenditure.
Current assets have fluctuated, with a significant drop from ₹31.27 crores in 2020 to ₹11.55 crores in 2025. Notably, sundry debtors appeared at ₹10.26 crores in 2025, absent in previous years, which may indicate changes in receivables management. Cash and bank balances have decreased sharply from ₹30.58 crores in 2020 to ₹0.14 crores in 2025, signalling a shift in liquidity position.
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Cash Flow Analysis
Cash flow from operating activities has been under pressure in recent years, turning negative at ₹-1 crore in 2025 and 2024, compared to a positive ₹9 crores in 2020. Changes in working capital have contributed to this strain, with a negative impact of ₹9 crores in 2025. Investing activities have generated modest positive cash flows, while financing activities have remained neutral throughout the period.
The company’s net cash inflow was zero in recent years, contrasting with a substantial ₹11 crores inflow in 2020. Opening cash and cash equivalents were ₹18 crores in 2020, rising to ₹30 crores by year-end, but have since diminished to negligible levels by 2025. This shift highlights a significant change in liquidity management and cash reserves over the period.
Summary of Historical Performance
Overall, R J Shah & Co has experienced a volatile financial journey marked by fluctuating revenues, variable profitability, and evolving asset and liquidity positions. The company demonstrated strong earnings and margins in 2020, followed by a period of subdued sales and profits, before showing signs of recovery in the latest fiscal year. Its conservative debt levels and growing reserves provide a stable financial foundation, though recent cash flow challenges warrant close monitoring.
Investors should consider these dynamics alongside sector trends and company-specific developments when evaluating R J Shah & Co’s prospects.
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