Revenue and Operating Income Trends
Over the seven-year period ending March 2025, Rama Phosphates’ net sales demonstrated notable volatility. The company recorded its highest sales in fiscal 2022 and 2023, with figures nearing ₹878 crore and ₹875 crore respectively. However, the latest fiscal year saw a decline to approximately ₹744 crore, reflecting a contraction of nearly 15% from the previous year. Earlier years showed a recovery trend from a low of ₹448 crore in 2020 to ₹606 crore in 2019, indicating cyclical market influences and operational adjustments.
Other operating income remained consistently nil throughout the period, indicating the company’s reliance on core sales activities for revenue generation.
Cost Structure and Profitability
The raw material cost has been the largest expenditure component, fluctuating in line with sales but showing a peak in fiscal 2023 at over ₹672 crore. Interestingly, raw material costs decreased in fiscal 2024 despite a rise in sales, suggesting improved procurement or operational efficiencies. Employee costs have steadily increased from ₹22 crore in 2019 to ₹35 crore in 2025, reflecting possible workforce expansion or wage inflation.
Notably, selling and distribution expenses were absent in the latest fiscal year, a sharp contrast to previous years where these costs ranged between ₹37 crore and ₹72 crore. Other expenses surged significantly in 2025 to ₹145 crore, more than doubling from the prior year, which may have impacted overall profitability.
Operating profit before other income (PBDIT) showed a strong recovery in 2023 and 2022, reaching over ₹106 crore, but dipped sharply to ₹43 crore in 2025. The company recorded a loss in 2024, highlighting a challenging year. Profit after tax (PAT) mirrored this trend, with a peak of ₹70 crore in 2022, followed by a steep decline to ₹14 crore in 2025, and a loss in 2024.
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Balance Sheet and Financial Position
Rama Phosphates’ shareholder funds have shown consistent growth, rising from ₹166 crore in 2020 to ₹371 crore in 2025. This increase reflects accumulated reserves and retained earnings, which grew from ₹148 crore to ₹354 crore over the same period. The company’s total liabilities also expanded, reaching ₹634 crore in 2025 from ₹299 crore in 2020, driven largely by a rise in current liabilities and short-term borrowings.
Long-term borrowings have been negligible, indicating a preference for short-term financing. The net block of fixed assets nearly doubled from ₹43 crore in 2020 to ₹161 crore in 2025, signalling capital investment and asset expansion. Capital work in progress also increased steadily, suggesting ongoing development projects.
Cash Flow and Liquidity
Cash flow from operating activities has been inconsistent, with positive inflows in 2021 and 2025 but negative cash flows in 2023 and 2024. Investing activities consistently showed cash outflows, reflecting capital expenditure commitments. Financing activities fluctuated, with significant inflows in 2022 and 2023 but outflows in 2021 and 2025. The company maintained a stable cash and bank balance around ₹10-11 crore in recent years.
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Summary of Historical Performance
Rama Phosphates has experienced a mixed performance over the past seven years. While sales and profitability peaked in fiscal 2022 and 2023, the company faced a significant downturn in 2024, with losses recorded at both operating and net profit levels. The rebound in 2025, though positive, remains subdued compared to earlier highs. The company’s balance sheet reflects steady growth in equity and asset base, supported by increased capital expenditure and reserves accumulation. However, rising current liabilities and fluctuating cash flows highlight ongoing liquidity management challenges.
Investors should note the cyclical nature of the company’s earnings and the impact of cost volatility, particularly in raw materials and other expenses. The recent absence of selling and distribution expenses in 2025 may indicate strategic shifts or accounting changes that warrant further scrutiny.
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