How has been the historical performance of Sai Silks?

Revenue Growth and Operating Performance

Over the five-year period ending March 2025, Sai Silks’ net sales have exhibited a consistent upward trend, rising from ₹677.25 crores in March 2021 to ₹1,462.01 crores in March 2025. This represents more than a doubling of sales, reflecting robust demand and effective market penetration. The total operating income mirrors this growth, with no other operating income reported, indicating that the core business activities have been the primary revenue drivers.

Operating profit before depreciation, interest, and tax (PBDIT) excluding other income has also shown significant improvement, increasing from ₹62.36 crores in March 2021 to ₹211.64 crores in March 2025. The operating profit margin, excluding other income, improved from 9.21% to 14.48% over the same period, signalling enhanced operational efficiency despite rising expenditure.

Other income contributed positively, rising from ₹1.85 crores in March 2021 to ₹24.07 crores in March 2025, further bolstering the operating profit (PBDIT) which reached ₹235.71 crores in the latest fiscal year. However, interest expenses have fluctuated, peaking at ₹52.87 crores in March 2024 before declining to ₹40.28 crores in March 2025, reflecting some improvement in debt servicing costs.

Profitability and Earnings Metrics

Profit before tax (PBT) has shown a steady rise from ₹7.31 crores in March 2021 to ₹142.72 crores in March 2025, underscoring the company’s improved bottom-line performance. Correspondingly, profit after tax (PAT) surged from a modest ₹5.13 crores in March 2021 to ₹85.39 crores in March 2025. Despite this growth, the PAT margin has experienced some volatility, peaking at 7.34% in March 2024 before moderating to 5.84% in the latest fiscal year.

Earnings per share (EPS) have reflected these trends, increasing from ₹2.13 in March 2021 to ₹5.8 in March 2025, although the EPS peaked at ₹8.11 in March 2023. The fluctuations in EPS and margins may be attributed to changes in share capital and operational factors over the years.

Balance Sheet Strength and Asset Management

Sai Silks’ shareholder funds have expanded significantly, rising from ₹242.99 crores in March 2021 to ₹1,131.77 crores in March 2025. This growth is supported by a substantial increase in reserves, which climbed from ₹218.93 crores to ₹1,102.30 crores over the same period, indicating strong retained earnings and capital accumulation.

The company’s total liabilities have also increased, reaching ₹1,640.65 crores in March 2025 from ₹665.42 crores in March 2021, reflecting expansion and possibly increased leverage. However, total debt has decreased from ₹345.50 crores in March 2023 to ₹166.54 crores in March 2025, signalling a reduction in borrowing and improved financial stability.

On the asset side, total assets have grown from ₹665.42 crores in March 2021 to ₹1,640.65 crores in March 2025, with net block (fixed assets) increasing steadily, indicating ongoing investment in infrastructure. Inventories and current assets have also risen, supporting the company’s operational scale.

Cash Flow and Liquidity Position

Cash flow from operating activities has been somewhat volatile, with a negative cash flow of ₹15 crores in March 2021 turning positive to ₹106 crores in March 2025. This improvement highlights better cash generation from core operations. Investing activities showed a significant inflow of ₹118 crores in March 2025, contrasting with outflows in previous years, which may indicate asset sales or other investment realisations.

Financing activities reflect a net outflow of ₹184 crores in March 2025, suggesting debt repayments or dividend payments. The net cash inflow stood at ₹41 crores in March 2025, improving the closing cash and cash equivalents to ₹85 crores, nearly doubling from the previous year.

Summary and Outlook

In summary, Sai Silks has demonstrated robust growth in revenue and profitability over the last five years, supported by a strengthening balance sheet and improving cash flow metrics. The company’s ability to double its sales and significantly increase shareholder funds while reducing debt levels is a positive indicator of financial health and operational efficiency. However, fluctuations in profit margins and EPS suggest some variability in earnings quality and capital structure adjustments.

Investors analysing Sai Silks should consider these historical trends alongside current market conditions and sector dynamics to assess future growth potential and risk factors.

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