How has been the historical performance of Rossell India?

Revenue and Operating Income Trends

Rossell India’s net sales have shown a consistent upward trend over the past eight years, rising from ₹157.56 crores in March 2016 to ₹366.66 crores in March 2024. This represents a more than twofold increase, reflecting the company’s expanding market presence and operational scale. Total operating income, which includes other operating income, has similarly increased, reaching ₹366.66 crores in the latest fiscal year, up from ₹161.14 crores in 2016. The growth trajectory, however, has not been entirely linear, with some fluctuations observed in intermediate years, such as a dip in 2021 compared to 2020.

Cost Structure and Profitability

The company’s expenditure profile reveals rising raw material costs, which climbed from ₹10.20 crores in 2016 to ₹108.79 crores in 2024, reflecting both volume growth and inflationary pressures. Employee costs have also increased steadily, reaching ₹142.54 crores in the latest year. Despite these rising costs, Rossell India maintained a positive operating profit (PBDIT) excluding other income, although this metric has seen volatility. Operating profit peaked at ₹68.45 crores in 2021 but declined to ₹38.10 crores by 2024. Including other income, operating profit stood at ₹43.78 crores in 2024, down from ₹70.45 crores in 2021.

Profitability Margins and Net Profit

Rossell India’s operating profit margin (excluding other income) has experienced a decline from a high of 21.71% in 2021 to 10.62% in 2024, indicating margin pressures possibly due to rising input costs and competitive dynamics. The gross profit margin similarly contracted to 8.1% in 2024 from 16.78% in 2021. Net profit after tax has also decreased, falling from ₹32.91 crores in 2021 to ₹12.73 crores in 2024. Correspondingly, the profit after tax margin declined from 10.44% to 3.55% over the same period. Earnings per share (EPS) followed this trend, dropping from 8.97 in 2021 to 3.38 in 2024, reflecting the reduced profitability.

Balance Sheet and Financial Position

The company’s shareholder funds have grown steadily, reaching ₹296.86 crores in 2024 from ₹168.59 crores in 2018, supported by accumulated reserves. Book value per share has improved from ₹45.94 in 2018 to ₹78.75 in 2024, signalling enhanced net asset value for shareholders. However, Rossell India’s total debt has also increased, rising to ₹194.02 crores in 2024 from ₹93.22 crores in 2018, with a notable shift from long-term to short-term borrowings. This shift may indicate a change in the company’s financing strategy or working capital requirements.

Cash Flow Analysis

Cash flow from operating activities has remained positive but has moderated in recent years, with ₹5 crores generated in 2024 compared to ₹35 crores in 2021. Investing activities have consistently been cash outflows, reflecting ongoing capital expenditure and investments. Financing activities have fluctuated, with a positive inflow of ₹19 crores in 2024 following negative outflows in prior years. The net cash inflow was modest at ₹1 crore in 2024, indicating tight liquidity management.

Summary of Historical Performance

Over the past eight years, Rossell India has expanded its revenue base significantly, more than doubling net sales. The company has managed to grow its shareholder equity and book value per share, signalling a strengthening balance sheet. However, profitability margins have contracted in recent years, with net profit and operating margins declining from their peaks in 2021. The increase in debt, particularly short-term borrowings, alongside moderated cash flows from operations, suggests a cautious financial stance amid rising costs and competitive pressures. Investors should weigh these factors carefully when considering Rossell India’s stock, balancing its growth potential against margin and liquidity challenges.

Outlook Considerations

While Rossell India’s historical performance shows resilience in revenue growth and asset accumulation, the recent dip in profitability margins and net earnings warrants close monitoring. The company’s ability to manage costs, optimise capital structure, and sustain cash flows will be critical to restoring stronger earnings momentum. Given its position in the heavy electrical equipment sector, market dynamics and sectoral demand trends will also play a pivotal role in shaping future performance.

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