How has been the historical performance of Shankar Lal Ram.?

Revenue and Profit Trends

Over the past seven years, Shankar Lal Ram. has seen its net sales rise from ₹175.87 crores in March 2019 to ₹401.78 crores in March 2025, reflecting a robust expansion in its top line. The company experienced some volatility, with sales dipping in 2020 but recovering strongly thereafter. Total operating income followed a similar pattern, reaching ₹401.78 crores in the latest fiscal year.

Operating profit (PBDIT) excluding other income peaked at ₹37.24 crores in March 2022 but declined to ₹16.45 crores by March 2025. This decline in operating profit was accompanied by a reduction in operating profit margin from 12.28% in 2022 to 4.09% in 2025, indicating margin pressure despite revenue growth. Profit after tax (PAT) also mirrored this trend, falling from ₹27.06 crores in 2022 to ₹11.39 crores in 2025, with PAT margin contracting from 8.92% to 2.83% over the same period.

Cost Structure and Expenses

The company’s expenditure profile reveals that the purchase of finished goods constitutes the largest cost component, rising from ₹163.69 crores in 2019 to ₹382.15 crores in 2025. Other expenses have fluctuated, peaking at ₹7.89 crores in 2023 before settling at ₹3.30 crores in 2025. Employee costs have remained relatively stable, averaging around ₹3 to ₹4 crores annually. Notably, raw material costs and power costs have been negligible or zero, suggesting a business model heavily reliant on finished goods procurement rather than manufacturing inputs.

Balance Sheet and Financial Position

Shankar Lal Ram.’s shareholder funds have grown steadily from ₹29.76 crores in 2019 to ₹98.54 crores in 2024, reflecting retained earnings and equity infusion. The equity capital increased significantly in 2022, which contributed to this rise. Total liabilities have also increased but remain manageable relative to assets, with total assets rising from ₹56.32 crores in 2019 to ₹105.59 crores in 2024.

Debt levels have decreased notably from ₹24.84 crores in 2019 to ₹6.20 crores in 2024, indicating a reduction in financial leverage and potentially lower interest burden. The company’s book value per share has improved from ₹6.20 in 2019 to ₹15.40 in 2024, signalling enhanced net asset value per share for investors.

Cash Flow Analysis

Cash flow from operating activities has been inconsistent, with negative cash flows recorded in 2020 and 2022 but positive inflows in other years, including ₹5 crores in 2024. Financing activities have mostly seen outflows, particularly in recent years, reflecting debt repayments or dividend payments. The company’s closing cash and cash equivalents have fluctuated, ending at ₹3 crores in 2024 after peaking at ₹12 crores in 2019.

Summary of Historical Performance

In summary, Shankar Lal Ram. has exhibited strong revenue growth over the last six years, more than doubling its net sales. However, profitability margins have contracted since their peak in 2022, reflecting increased costs or pricing pressures. The company has strengthened its balance sheet by reducing debt and increasing shareholder equity, which enhances financial stability. Cash flow patterns suggest some volatility, but overall the firm maintains positive operating cash generation in recent years.

Investors should note the company’s reliance on purchasing finished goods rather than raw materials, which may influence cost dynamics and margin sustainability. The steady increase in book value per share and reduction in debt are positive indicators of financial health. Nonetheless, the recent decline in profit margins warrants close monitoring to assess future earnings quality and operational efficiency.

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