Revenue and Operating Income Trends
RCF's net sales have demonstrated considerable volatility over the past seven years. Starting at ₹8,885.47 crores in March 2019, sales dipped slightly in the following year before surging to a peak of ₹21,451.54 crores in March 2023. However, the most recent fiscal years have seen a decline, with net sales at ₹16,933.64 crores in March 2025, slightly below the previous year’s ₹16,981.31 crores. This fluctuation suggests sensitivity to market conditions and possibly raw material price variations or demand shifts.
The company’s total operating income mirrors this pattern, as other operating income remained nil throughout, indicating reliance solely on core sales. Raw material costs and purchase of finished goods have scaled in line with revenue, with raw material expenses rising from ₹3,880.01 crores in 2019 to ₹5,821.61 crores in 2025, reflecting inflationary pressures and production scale.
Profitability and Margins
Operating profit (PBDIT) excluding other income peaked at ₹1,473.19 crores in March 2023 but has since contracted to ₹674.75 crores in March 2025. Including other income, operating profit followed a similar trend, reaching ₹1,616.49 crores in 2023 before declining to ₹839.57 crores in 2025. This decline in operating profit is accompanied by a reduction in operating profit margin from a high of 8.85% in 2021 to 3.98% in 2025, signalling margin pressure.
Profit after tax (PAT) also reflects this volatility, with a peak of ₹967.15 crores in 2023, falling to ₹241.63 crores in 2025. Correspondingly, PAT margin decreased from 5.31% in 2022 to 1.43% in 2025. Earnings per share (EPS) followed suit, peaking at 17.52 in 2023 before dropping to 4.39 in 2025. These figures highlight the challenges faced in sustaining profitability amid fluctuating revenues and rising costs.
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Balance Sheet and Financial Position
RCF’s shareholder’s funds have steadily increased from ₹3,351.31 crores in 2021 to ₹4,745.33 crores in 2025, supported by rising reserves which grew from ₹2,781.74 crores to ₹4,193.64 crores over the same period. This indicates a strengthening equity base despite profit fluctuations.
Total liabilities have also increased, reaching ₹11,266.63 crores in 2025, with total debt standing at ₹2,751.92 crores. Long-term borrowings have remained relatively stable, while short-term borrowings have fluctuated significantly, reflecting working capital management challenges. The company’s net block of fixed assets has grown from ₹2,162.26 crores in 2021 to ₹2,892.12 crores in 2025, indicating ongoing capital investment.
Cash Flow Analysis
Cash flow from operating activities has shown marked variability, with a strong inflow of ₹5,211 crores in 2021 but a negative cash flow of ₹422 crores in 2024. The latest fiscal year saw a recovery to ₹2,363 crores in 2025. Investing activities consistently recorded outflows, reflecting capital expenditure commitments. Financing activities have alternated between inflows and outflows, with a net outflow of ₹852 crores in 2025, suggesting debt repayments or dividend payments.
Closing cash and cash equivalents have improved significantly to ₹987 crores in 2025 from just ₹156 crores in 2024, providing a healthier liquidity position.
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Summary and Investor Considerations
RCF’s historical performance reflects a company that has navigated through periods of strong growth and profitability as well as phases of contraction and margin pressure. The peak in revenues and profits around 2023 was followed by a notable decline in the subsequent two years, highlighting the cyclical nature of the business and external market influences.
While the company has maintained a solid equity base and invested in fixed assets, the pressure on operating margins and net profit margins warrants close monitoring. Cash flow volatility also suggests the need for prudent working capital and financing management. Investors should weigh these factors carefully, considering both the company’s capacity for recovery and the competitive landscape within the fertiliser sector.
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