How has been the historical performance of SRG Housing?

Revenue and Income Growth

Over the past seven years, SRG Housing's net sales have shown a robust increase, rising from ₹59.33 crores in March 2019 to ₹143.32 crores by March 2025. This represents a more than twofold growth, reflecting the company's expanding market presence and operational scale. Other operating income has also contributed positively, albeit with some fluctuations, reaching ₹8.19 crores in the latest fiscal year. Consequently, total operating income climbed from ₹59.33 crores in 2019 to ₹151.51 crores in 2025, underscoring a strong revenue base.

Cost Structure and Profitability

SRG Housing's expenditure profile reveals a significant rise in employee costs, which increased from ₹7.49 crores in 2019 to ₹37.42 crores in 2025, indicating investment in human resources to support growth. Other expenses also escalated from ₹31.49 crores to ₹80.42 crores over the same period. Despite these rising costs, the company maintained a positive operating profit (PBDIT) excluding other income, which grew from ₹20.35 crores in 2019 to ₹33.67 crores in 2025. Including other income, operating profit reached ₹36.72 crores in the latest year.

Interest Burden and Profit Margins

One notable challenge for SRG Housing has been the rising interest expense, which surged from ₹23.01 crores in 2019 to ₹62.04 crores in 2025. This increase has exerted pressure on gross profit, which remained negative throughout the period, reaching -17.67% margin in 2025. However, the company managed to sustain positive profit before tax, which increased from ₹19.97 crores in 2019 to ₹30.06 crores in 2025. Profit after tax also showed a healthy rise, from ₹14.17 crores to ₹24.40 crores, although the PAT margin declined from nearly 28% in earlier years to 17.02% in 2025, reflecting the impact of higher financing costs.

Balance Sheet Strength and Shareholder Value

SRG Housing's balance sheet has strengthened considerably, with shareholder's funds rising from ₹74.86 crores in 2020 to ₹263.95 crores in 2025. Reserves have grown substantially, supporting the company's net worth. The book value per share has improved from ₹57.58 in 2020 to ₹168.38 in 2025, indicating enhanced shareholder value. However, the company carries a significant debt load, with total debt increasing from ₹245.58 crores in 2020 to ₹584.33 crores in 2025, which corresponds with the rising interest expenses noted earlier.

Cash Flow Dynamics

Cash flow from operating activities has been negative in recent years, with ₹-131 crores in 2025, reflecting working capital pressures and investment needs. Despite this, financing activities have provided substantial inflows, amounting to ₹172 crores in 2025, which have helped maintain a positive net cash inflow of ₹10 crores for the year. The closing cash and cash equivalents stood at ₹31 crores in 2025, up from ₹21 crores the previous year, indicating improved liquidity management.

Summary of Historical Performance

In summary, SRG Housing has exhibited strong revenue growth and improved profitability over the last several years, supported by expanding operations and rising reserves. The company has successfully increased its earnings per share and book value, enhancing shareholder wealth. However, the rising interest burden and negative gross profit margins highlight ongoing financial challenges, particularly related to debt servicing and cost management. Cash flow trends suggest the company relies heavily on financing activities to support its operations and growth initiatives.

Investors considering SRG Housing should weigh its consistent top-line growth and profit generation against the risks posed by elevated debt levels and interest expenses. The company’s ability to manage these factors will be crucial for sustaining its positive trajectory in the coming years.

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