Revenue and Profitability Trends
Raj Rayon Inds. reported a substantial increase in net sales, rising from a modest ₹137.22 crores in the fiscal year ending March 2023 to ₹849.38 crores in March 2025. This surge reflects a strong operational revival after years of minimal or negligible sales, including near-zero figures in 2021 and 2022. Correspondingly, the total operating income mirrored this growth, indicating a robust expansion in core business activities.
Operating profit before depreciation and interest (PBDIT) also improved markedly, reaching ₹34.28 crores in March 2025 from a mere ₹2.21 crores in March 2023. Despite this positive trend, operating profit margins remain modest at around 3.48% in the latest year, suggesting room for margin enhancement as the company scales. Profit after tax (PAT) turned positive with ₹13.81 crores in March 2025, a significant turnaround from losses recorded in previous years, including a notable loss of ₹12.38 crores in March 2023.
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Cost Structure and Margins
The company’s raw material costs have scaled in line with sales, reaching ₹682.61 crores in March 2025, up from ₹153.17 crores two years prior. Other expenses also increased but remained proportionate to revenue growth. Employee costs have risen steadily, reflecting operational expansion and workforce strengthening. Despite rising costs, Raj Rayon Inds. has managed to maintain a positive gross profit margin, which stood at 2.44% in the latest fiscal year, improving from 0.66% in 2023.
Interest expenses have increased to ₹13.58 crores in March 2025, reflecting higher borrowings, yet the company has sustained profitability, indicating effective cost and debt management. Depreciation charges have decreased slightly, contributing to improved earnings before tax.
Balance Sheet and Financial Position
On the balance sheet front, shareholder’s funds have strengthened, rising to ₹122.47 crores in March 2025 from ₹104.14 crores in 2023, signalling improved net worth. Total liabilities have increased to ₹500.29 crores, driven primarily by a rise in long-term borrowings to ₹159.72 crores and short-term borrowings to ₹77.71 crores, reflecting the company’s financing activities to support growth.
Net block of fixed assets has expanded to ₹212.45 crores, supported by capital work in progress of ₹101.46 crores, indicating ongoing investments in capacity or infrastructure. Current assets stood at ₹181.69 crores, with a negative net current asset position of approximately ₹36 crores, suggesting working capital pressures that the company may need to address.
Cash Flow Dynamics
Cash flow from operating activities has shown a positive trend, with ₹36 crores generated in the latest fiscal year, a recovery from negative cash flows in prior years. Investing activities have consistently absorbed cash, with ₹83 crores spent in March 2025, reflecting capital expenditure commitments. Financing activities have provided inflows of ₹47 crores, supporting the company’s investment and operational needs. The net cash inflow remains modest at ₹1 crore, with closing cash and bank balances at ₹8 crores, indicating a cautious liquidity position.
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Summary and Outlook
Raj Rayon Inds. has demonstrated a remarkable turnaround from years of negligible sales and losses to a phase of growing revenues and positive profitability. The company’s financial health has improved with enhanced shareholder equity and manageable debt levels, although working capital management remains an area to watch. The steady increase in operating profit and positive cash flows from operations suggest a stabilising business model with potential for further growth.
Investors should note the modest profit margins and the ongoing capital expenditure, which may impact near-term earnings but could support long-term expansion. Overall, Raj Rayon Inds. presents a case of recovery and cautious optimism, with fundamentals improving steadily after a challenging period.
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