How has been the historical performance of Shahlon Silk?

Dec 03 2025 10:56 PM IST

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Shahlon Silk has experienced a declining trend in net sales and profits from March 2019 to March 2025, with net sales dropping from INR 531.44 crore to INR 251.27 crore, and profit after tax decreasing from INR 3.98 crore to INR 3.50 crore. Total assets and liabilities also fell during this period, indicating overall financial contraction.

Revenue and Profit Trends

Examining Shahlon Silk's net sales from fiscal year ending March 2019 through March 2025, the company experienced a peak in sales at ₹531.44 crores in 2019, followed by a notable decline to ₹251.27 crores by 2025. This downward trend reflects a contraction of over 50% in top-line revenue over six years, with intermittent fluctuations. The years 2020 and 2021 saw significant dips, likely influenced by broader market disruptions, before stabilising somewhat in subsequent years.

Operating profit margins, excluding other income, have shown improvement despite the sales decline. Margins rose from 6.98% in 2019 to 11.32% in 2025, indicating enhanced cost control and operational efficiency. The operating profit (PBDIT) in absolute terms, however, declined from ₹37.10 crores in 2019 to ₹28.45 crores in 2025, mirroring the revenue contraction but reflecting better margin management.

Profit after tax (PAT) has remained modest, with margins hovering around 1.3% in recent years. The PAT in 2025 stood at ₹3.50 crores, slightly down from ₹3.98 crores in 2024 but consistent with the company's historical range. Earnings per share (EPS) have also decreased from ₹3.35 in 2019 to ₹0.39 in 2025, impacted by both reduced profitability and changes in share capital face value.

Cost Structure and Operational Efficiency

Shahlon Silk's cost of raw materials and purchase of finished goods have both decreased in line with declining sales, with raw material costs dropping from ₹184.81 crores in 2019 to ₹75.24 crores in 2025, and purchases of finished goods reducing from ₹226.22 crores to ₹119.00 crores over the same period. This adjustment reflects the company's efforts to align input costs with revenue realities.

Employee costs have also been managed carefully, decreasing from ₹33.33 crores in 2019 to ₹20.97 crores in 2025, while manufacturing expenses, introduced in recent years, stood at ₹15.71 crores in 2025. Selling and distribution expenses have remained relatively stable, around ₹7 crores in the latest fiscal year.

Interest expenses have fluctuated but remained significant, around ₹17 crores in 2025, reflecting the company's leverage position. Depreciation charges have steadily declined from ₹14.53 crores in 2019 to ₹6.40 crores in 2025, consistent with asset base reductions.

Balance Sheet and Financial Position

Shahlon Silk's shareholder funds have grown gradually from ₹90.13 crores in 2020 to ₹105.69 crores in 2025, supported by steady reserves accumulation. The company's total debt has remained relatively stable, around ₹133 crores in 2025, indicating a consistent leverage level despite revenue pressures.

Non-current assets have decreased from ₹125.75 crores in 2020 to ₹83.92 crores in 2025, reflecting asset depreciation and possible disposals. Current assets have fluctuated, with inventories rising to ₹95.24 crores in 2025 and sundry debtors at ₹97.28 crores, signalling working capital demands. Net current assets improved to ₹100.43 crores in 2025, indicating better liquidity management compared to previous years.

Cash Flow and Liquidity

Operating cash flows have been positive in recent years, with ₹10 crores generated in 2024 and 2022, after a negative cash flow in 2021. Investing activities have varied, with minor inflows and outflows, while financing activities have consistently seen outflows, reflecting debt repayments or dividend payments. The closing cash and cash equivalents have remained low but stable, around ₹1 crore, suggesting limited cash reserves but controlled liquidity risk.

Summary and Investor Considerations

Overall, Shahlon Silk's historical performance reflects a company navigating a challenging market environment with declining sales but improving operational margins. The firm has managed to maintain profitability, albeit at modest levels, while controlling costs and managing its balance sheet prudently. Investors should note the steady leverage and limited cash reserves, balanced by improving net current assets and stable shareholder funds.

While earnings per share have contracted significantly from earlier highs, the company's focus on operational efficiency and cost management has helped sustain positive cash flows and profitability. Prospective investors may wish to weigh these factors alongside sector dynamics and alternative investment opportunities.

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