Revenue and Profitability Trends
Over the seven-year period ending March 2025, Source Natural’s net sales exhibited a robust upward trend, rising from ₹12.77 crores in March 2019 to ₹44.92 crores in March 2025. This represents a more than threefold increase, underscoring the company’s expanding market presence and sales capabilities. Total operating income followed a similar pattern, reflecting consistent growth in core business activities.
Operating profit before depreciation, interest, and tax (PBDIT) also improved steadily, climbing from ₹1.56 crores in March 2019 to ₹5.23 crores in March 2025. However, operating profit margins have seen some compression in recent years, declining from a peak of over 18% in March 2023 to approximately 11.5% in March 2025. This margin contraction may be attributed to rising costs, particularly in the purchase of finished goods, which surged significantly in the latest fiscal year.
Profit after tax (PAT) has fluctuated, reaching a high of ₹3.39 crores in March 2021 before moderating to ₹2.90 crores in March 2025. Correspondingly, PAT margins have narrowed from a peak of 13.6% in 2021 to around 6.5% in the most recent year, indicating some pressure on net profitability despite revenue growth.
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Balance Sheet and Financial Position
Source Natural’s balance sheet reflects a strengthening financial position over the years. Shareholders’ funds have grown from ₹9.79 crores in March 2020 to ₹22.36 crores in March 2025, supported by steady accumulation of reserves. The book value per share has correspondingly increased from ₹15.21 to ₹34.73, indicating enhanced net asset value per equity share.
The company has maintained a relatively low level of long-term borrowings, with no long-term debt reported in the latest fiscal year. However, short-term borrowings have increased notably to ₹7.41 crores in March 2025 from ₹0.91 crores in March 2021, suggesting a shift towards more reliance on working capital financing. Total liabilities have risen in line with asset growth, reaching ₹35.83 crores in March 2025.
On the asset side, total assets have expanded from ₹12.28 crores in March 2020 to ₹35.83 crores in March 2025. This growth is supported by increases in current assets, particularly inventories and sundry debtors, which have more than doubled over the period. Net block of fixed assets has also increased, reflecting ongoing investment in property, plant, and equipment.
Cash Flow and Operational Efficiency
Cash flow from operating activities has been somewhat uneven, with positive inflows recorded in some years and nil or zero in others. The latest fiscal year saw no cash flow from operations, impacted by a significant negative change in working capital. Investing activities have generally involved outflows, consistent with capital expenditure and asset acquisitions. Financing activities have fluctuated, with a notable inflow of ₹5 crores in March 2025, likely linked to short-term borrowings.
Despite some volatility in cash flows, the company has maintained a healthy cash and bank balance, which stood at ₹7.23 crores in March 2025, up from negligible levels in earlier years. This liquidity position provides a buffer for operational needs and potential investment opportunities.
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Summary and Investor Considerations
In summary, Source Natural has exhibited strong revenue growth and an expanding asset base over the past several years, supported by increasing shareholder equity and prudent management of long-term debt. Profitability margins have experienced some pressure recently, particularly in operating and net profit margins, which investors should monitor closely. The company’s liquidity position remains solid, with a healthy cash balance and manageable short-term borrowings.
For investors, the historical performance suggests a company in expansion mode, balancing growth with cautious financial management. While margin compression warrants attention, the overall upward trend in sales and net assets indicates potential for continued value creation. Prospective shareholders should weigh these factors alongside sector dynamics and alternative investment opportunities.
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