Revenue and Profit Growth
In the fiscal year ending March 2025, Sugal & Damani reported net sales of ₹25.34 crores, a remarkable rise from ₹4.88 crores in the previous year. This surge in revenue underscores the company’s successful expansion and market penetration efforts. Total operating income mirrored this growth, reaching ₹25.34 crores compared to ₹4.88 crores a year earlier.
Despite the impressive top-line growth, the operating profit margin excluding other income declined from 43.03% in March 2024 to 22.61% in March 2025. This contraction was influenced by increased expenditure, particularly in purchase of finished goods and manufacturing expenses. Nevertheless, the company’s operating profit (PBDIT) excluding other income rose to ₹5.73 crores from ₹2.10 crores, indicating improved absolute profitability.
Other income decreased to ₹0.80 crores from ₹1.50 crores, yet the overall operating profit (PBDIT) increased to ₹6.53 crores from ₹3.60 crores. Interest expenses were significantly reduced to ₹0.13 crores from ₹0.58 crores, contributing to a higher gross profit before depreciation and tax (PBDT) of ₹6.40 crores, up from ₹3.02 crores the previous year.
Profit before tax doubled to ₹6.34 crores, while profit after tax more than doubled to ₹4.75 crores from ₹2.31 crores. Earnings per share (EPS) also reflected this positive trend, rising to ₹7.6 from ₹3.7, signalling enhanced shareholder value.
Turnaround taking shape! This Small Cap from NBFC sector just hit profitability with strong business fundamentals showing up. Catch it before the major breakout happens!
- - Recently turned profitable
- - Strong business fundamentals
- - Pre-breakout opportunity
Cost Structure and Margins
The company’s cost structure saw notable changes, with purchase of finished goods decreasing sharply from ₹17.43 crores to ₹5.66 crores, while the (increase)/decrease in stocks swung from a negative ₹16.31 crores to a positive ₹7.41 crores. Employee costs rose moderately to ₹1.53 crores from ₹1.01 crores, and manufacturing expenses increased to ₹4.42 crores from a minimal ₹0.11 crores, reflecting scaling operations.
Despite the decline in operating and PAT margins to 22.61% and 18.75% respectively, from 43.03% and 47.34% the previous year, the absolute profit growth indicates that the company is investing in its growth trajectory while maintaining profitability.
Balance Sheet Strength and Asset Quality
Sugal & Damani’s balance sheet exhibits strengthening fundamentals. Shareholders’ funds increased to ₹25.89 crores from ₹21.26 crores, supported by a rise in reserves to ₹19.64 crores from ₹15.01 crores. The company remains debt-free, with no long-term or short-term borrowings reported in either year, underscoring a conservative capital structure.
Non-current investments surged to ₹10.50 crores from ₹1.82 crores, while current investments also rose significantly to ₹10.37 crores from ₹1.69 crores, indicating a strategic allocation of surplus funds. Inventories decreased to ₹9.51 crores from ₹16.34 crores, suggesting improved inventory management. Cash and bank balances nearly doubled to ₹4.98 crores from ₹2.89 crores, enhancing liquidity.
The company’s total assets grew to ₹32.64 crores from ₹27.49 crores, with net block assets increasing to ₹0.49 crores from ₹0.11 crores, reflecting capital expenditure on fixed assets. Book value per share improved to ₹41.42 from ₹34.02, reinforcing the company’s net worth growth.
Why settle for Sugal & Damani? SwitchER evaluates this Non Banking Financial Company (NBFC) Microcap against peers, other sectors, and market caps to find you superior investment opportunities!
- - Comprehensive evaluation done
- - Superior opportunities identified
- - Smart switching enabled
Cash Flow and Financial Health
The company’s cash flow position improved markedly in the year ending March 2025. Cash flow from operating activities turned positive at ₹13.00 crores, a significant turnaround from a negative ₹6.00 crores the previous year. This was driven by a favourable change in working capital of ₹9.00 crores, compared to a negative ₹7.00 crores earlier.
Investing activities reflected an outflow of ₹8.00 crores, likely related to increased investments and asset acquisitions, while financing activities showed a modest outflow of ₹2.00 crores. The net cash inflow stood at ₹2.00 crores, resulting in closing cash and cash equivalents of ₹2.00 crores, up from nil the prior year.
Overall, the company’s financial health appears robust, with no debt obligations and growing reserves, positioning it well for future growth opportunities.
Outlook and Investor Considerations
Sugal & Damani’s historical performance over the last fiscal year highlights a company in transition, with strong revenue growth and improved profitability despite margin pressures. The absence of debt and increasing reserves provide a solid foundation for sustainable expansion. Investors should note the company’s strategic investments and improved cash flows as positive indicators, while monitoring margin trends and cost management going forward.
With earnings per share more than doubling and book value per share rising substantially, the company has enhanced shareholder value significantly. However, the contraction in margins suggests that operational efficiencies will be key to maintaining profitability as the business scales.
Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →
