How has been the historical performance of Sahara Housing?

Revenue and Profitability Trends

Over the seven-year period ending March 2025, Sahara Housing's net sales have steadily decreased from ₹13.37 crores in 2019 to ₹8.58 crores in 2025. This decline reflects a contraction of approximately 36% in top-line revenue. Other operating income has remained minimal, contributing marginally to total operating income, which similarly fell from ₹13.44 crores in 2019 to ₹8.61 crores in 2025.

Operating expenses, excluding depreciation, have also decreased in line with revenue, dropping from ₹12.45 crores in 2019 to ₹7.45 crores in 2025. Employee costs have remained relatively stable, hovering around ₹3 crores annually, while other expenses have seen a notable reduction from ₹9.27 crores in 2019 to ₹4.51 crores in 2025.

Despite these cost reductions, operating profit before other income (PBDIT) declined from ₹3.91 crores in 2019 to ₹1.17 crores in 2025. Other income, which was ₹2.92 crores in 2019, diminished sharply to just ₹0.01 crores by 2025, further impacting overall profitability.

Debt and Liabilities

Sahara Housing has made significant strides in reducing its debt burden. Total debt decreased from ₹73.54 crores in 2020 to ₹22.36 crores in 2025, marking a substantial deleveraging effort. Short-term borrowings, which constituted the bulk of the debt, fell from ₹73.54 crores in 2020 to ₹22.36 crores in 2025. Non-current liabilities also declined markedly from ₹72.38 crores in 2020 to ₹21.13 crores in 2025.

This reduction in liabilities has positively influenced the company's shareholder funds, which increased from ₹44.89 crores in 2020 to ₹52.39 crores in 2025. Correspondingly, the book value per share rose from ₹64.13 in 2020 to ₹74.84 in 2025, indicating an improvement in net asset value per share despite the revenue decline.

Deferred tax liabilities have remained relatively stable, with a slight decrease from -₹1.16 crores in 2020 to -₹1.24 crores in 2025.

Profitability Margins and Earnings

Operating profit margins, excluding other income, have fluctuated over the years, peaking at 22.98% in 2023 before declining to 13.52% in 2025. Gross profit margins have consistently been negative, reflecting the company's challenges in covering interest and depreciation costs. The gross profit margin stood at -17.48% in 2025, an improvement from -28.27% in 2019 but still indicative of operational pressures.

Profit after tax (PAT) margins have mirrored this trend, decreasing from 19.52% in 2019 to 7.58% in 2025. Earnings per share (EPS) have also declined significantly, from ₹3.73 in 2019 to ₹0.93 in 2025, underscoring the impact of reduced profitability on shareholder returns.

Asset Base and Cash Flow

The company's total assets have contracted from ₹122.38 crores in 2020 to ₹74.44 crores in 2025, reflecting the overall downsizing of operations. Non-current assets have decreased significantly, with long-term loans and advances dropping from ₹102.81 crores in 2020 to ₹63.63 crores in 2025. Net block of fixed assets has also declined from ₹0.91 crores in 2020 to ₹0.55 crores in 2025.

Current assets have seen a sharp reduction, particularly cash and bank balances, which fell from ₹20.89 crores in 2020 to ₹8.66 crores in 2025. Net current assets have remained negative for most years, indicating working capital challenges.

Cash flow from operating activities has been volatile, peaking at ₹29 crores in 2020 but falling to ₹24 crores in 2025. Financing activities have consistently shown cash outflows, reflecting debt repayments and other financing costs. The net cash inflow/outflow has been largely neutral in recent years, with closing cash and cash equivalents stabilising around ₹3 crores in 2025.

Summary of Historical Performance

In summary, Sahara Housing has experienced a steady decline in revenue and profitability over the past seven years, accompanied by a concerted effort to reduce debt and strengthen its balance sheet. While operating margins and earnings per share have contracted, the company’s deleveraging has improved shareholder equity and book value per share. Cash flow management remains a critical area, with operating cash flows fluctuating and current liabilities exceeding current assets in most years.

Investors analysing Sahara Housing’s historical performance should weigh the trade-offs between shrinking top-line growth and improved financial stability, considering the company’s ongoing efforts to manage liabilities and preserve shareholder value.

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