How has been the historical performance of Shankara Build.?

Revenue and Profitability Trends

Shankara Build.'s net sales demonstrated a notable peak in the fiscal year ending March 2024, reaching ₹4,828.44 crores, before sharply declining to ₹1,362.47 crores in March 2025. This steep drop in revenue marks a significant deviation from the previous upward trend observed since 2019. The total operating income mirrored this pattern, reflecting the company's core business activity without other operating income contributions, which remained nil throughout the period.

Operating profit (PBDIT) excluding other income also followed a similar trajectory, peaking at ₹151.11 crores in March 2024 before falling to ₹18.44 crores in March 2025. The operating profit margin declined from 3.13% in 2024 to 1.35% in 2025, indicating reduced operational efficiency or increased cost pressures. Profit after tax (PAT) further underscores this volatility, with a positive ₹81.13 crores in 2024 turning into a marginal loss of ₹0.79 crores in 2025. Earnings per share (EPS) reflected this downturn, dropping from a robust 33.46 in 2024 to a negative 0.08 in 2025.

Cost Structure and Margins

The company's cost of raw materials and purchase of finished goods have shown considerable fluctuations. Raw material costs surged to ₹1,336.80 crores in 2025 from ₹961.69 crores in 2024, while purchase of finished goods dropped to zero in 2025 from ₹3,636.48 crores the previous year, suggesting a shift in procurement or production strategy. Other expenses decreased significantly in 2025 to ₹27.25 crores from ₹73.40 crores in 2024, which may have partially offset the impact of rising raw material costs.

Despite these adjustments, the total expenditure excluding depreciation remained high relative to revenue, contributing to the compressed operating margins. Interest expenses also declined sharply from ₹32.34 crores in 2024 to ₹9.99 crores in 2025, reflecting reduced borrowing costs or debt levels.

Balance Sheet and Financial Position

Shankara Build.'s balance sheet reveals a steady increase in shareholder's funds, rising from ₹521.67 crores in 2021 to ₹867.80 crores in 2025, supported by growing reserves. The book value per share improved consistently, reaching ₹357.86 in 2025 from ₹228.30 in 2021, indicating enhanced net asset value per share over time.

Long-term borrowings have been substantially reduced from ₹37.83 crores in 2021 to ₹2.40 crores in 2025, signalling a strategic deleveraging. However, short-term borrowings increased to ₹99.67 crores in 2025 from ₹69.01 crores in 2024, which may suggest a shift in the company's financing mix. Total liabilities rose to ₹1,801.83 crores in 2025 from ₹925.80 crores in 2021, largely driven by increased trade payables and current liabilities.

Cash Flow Analysis

Operating cash flow has been volatile, with ₹63 crores generated in 2025 compared to just ₹9 crores in 2024. Cash flow from investing activities remained negative, reflecting ongoing capital expenditure or investments, while financing activities showed a net outflow of ₹42 crores in 2025, contrasting with an inflow in the previous year. The net cash position slightly declined in 2025, closing at ₹23 crores.

Summary of Historical Performance

Over the past six years, Shankara Build. has experienced significant fluctuations in its financial performance. The company saw steady revenue growth from 2019 through 2024, culminating in a peak in 2024 before a sharp decline in 2025. Profitability followed a similar pattern, with operating and net profits reaching highs in 2024 but contracting sharply in the latest fiscal year. The company has actively managed its debt, reducing long-term borrowings substantially, though short-term liabilities have increased.

Asset growth has been consistent, with total assets rising steadily, supported by increases in net block and current assets. The company’s cash flow generation remains positive but variable, reflecting the cyclical nature of its operations and investment activities. Overall, Shankara Build.'s historical performance reflects a business navigating market challenges with periods of strong growth and recent operational pressures impacting profitability.

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