Revenue and Profitability Trends
SRM Contractors’ net sales have shown a remarkable upward trajectory, rising from ₹300.29 crores in March 2023 to ₹528.13 crores by March 2025. This represents a compound growth rate exceeding 35% annually, reflecting strong demand and operational expansion. The total operating income mirrors this growth, as the company reported no other operating income during this period.
On the cost front, raw material expenses increased in line with sales, reaching ₹380.12 crores in March 2025 from ₹217.58 crores two years prior. Employee costs also rose steadily, indicating workforce expansion or wage adjustments, while other expenses fluctuated but remained significant. Despite rising costs, SRM Contractors improved its operating profit margin (excluding other income) from 12.75% in March 2023 to 15.42% in March 2025, signalling enhanced operational efficiency.
Operating profit (PBDIT) nearly doubled from ₹38.30 crores in March 2023 to ₹81.44 crores in March 2025, with other income contributing additional gains. Consequently, profit before tax surged from ₹25.05 crores to ₹74.34 crores, and profit after tax more than doubled from ₹18.75 crores to ₹55.00 crores over the same period. Earnings per share (EPS) followed suit, rising from ₹11.20 to ₹23.98, underscoring improved shareholder returns.
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Balance Sheet and Financial Position
The company’s balance sheet reflects substantial strengthening. Shareholder’s funds surged from ₹63.37 crores in March 2023 to ₹275.54 crores in March 2025, driven by increased reserves and equity capital. The book value per share more than tripled, reaching ₹120.09 by March 2025, indicating enhanced net asset value per share.
SRM Contractors managed its debt prudently, with total debt slightly declining from ₹46.96 crores in March 2023 to ₹40.89 crores in March 2025, despite business expansion. Long-term borrowings decreased notably, while short-term borrowings rose moderately, suggesting a shift in debt structure. Total liabilities grew in line with asset expansion, with total assets rising from ₹136.04 crores to ₹407.63 crores over two years.
On the asset side, net block (fixed assets) nearly doubled, reflecting capital investments. Current assets also expanded significantly, particularly inventories and cash and bank balances, which increased to ₹85.07 crores and ₹92.95 crores respectively by March 2025. This growth in liquidity and working capital supports operational scalability.
Cash Flow and Operational Efficiency
Cash flow from operating activities showed variability, with ₹21 crores in March 2023 declining to ₹1 crore in March 2025, impacted by changes in working capital. Despite this, net cash inflow remained positive, supported by strong financing activities that contributed ₹78 crores in March 2025. Investing activities reflected ongoing capital expenditure, with outflows increasing to ₹46 crores in the latest year.
Profit before tax and adjustments consistently improved, indicating solid earnings quality. The company’s ability to generate cash and manage its capital structure will be critical as it continues to grow.
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Summary of Historical Performance
Overall, SRM Contractors has exhibited strong historical performance characterised by rapid revenue growth, expanding profitability margins, and a fortified balance sheet. The company’s net profit margin improved from 6.24% in March 2023 to 10.41% in March 2025, reflecting better cost control and operational leverage. Earnings per share growth and rising book value per share further highlight value creation for shareholders.
While cash flow from operations has shown some pressure due to working capital changes, the firm’s financing activities and asset base expansion indicate a strategic investment phase. The reduction in long-term debt alongside increased reserves suggests a cautious approach to leverage. Investors should consider these factors alongside sector dynamics when evaluating SRM Contractors’ prospects.
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