How has been the historical performance of Sunflag Iron?

Revenue and Profitability Trends

Sunflag Iron’s net sales have shown a robust upward trend, rising from ₹2,229.49 crores in March 2019 to ₹3,535.59 crores by March 2025. This growth reflects the company’s expanding market presence and operational scale. Despite a slight dip in sales in 2020, likely influenced by broader economic conditions, the company rebounded strongly in subsequent years.

Operating profit margins, excluding other income, have remained relatively stable, fluctuating between approximately 9.7% and 14.8% over the period. The margin peaked in 2022 at 14.76%, indicating efficient cost management during that year. The operating profit (PBDIT) itself increased from ₹237.77 crores in 2019 to ₹405.83 crores in 2025, underscoring improved operational performance.

Profit after tax (PAT) has also followed an upward trajectory, with consolidated net profit rising from ₹110.25 crores in 2019 to ₹162.06 crores in 2025. The PAT margin, however, has been more variable, influenced notably by an exceptional profit in 2023, which inflated the margin to nearly 32%. Excluding this anomaly, the PAT margin has generally hovered between 4.15% and 8.02%, reflecting steady profitability.

Cost Structure and Expenditure

The company’s raw material costs have naturally scaled with revenue, rising from ₹1,473.47 crores in 2019 to ₹2,228.97 crores in 2025. Other expenses have also increased, from ₹517.02 crores in 2019 to ₹801.44 crores in 2025, reflecting expanded operations and inflationary pressures. Employee costs have seen a moderate rise, indicating controlled labour expenses relative to growth.

Interest expenses have fluctuated, peaking in 2024 at ₹96.71 crores before easing to ₹89.90 crores in 2025. Depreciation charges have steadily increased, consistent with asset additions and capital expenditure.

Balance Sheet and Asset Growth

Sunflag Iron’s total assets have expanded significantly, from ₹2,398.90 crores in 2020 to ₹11,187.01 crores in 2025. This growth is largely driven by a substantial increase in non-current investments, which surged from under ₹20 crores in 2021 to ₹7,779.06 crores in 2025, signalling strategic investments or acquisitions. Net block of fixed assets also rose steadily, indicating ongoing capital expenditure and capacity enhancement.

Shareholders’ funds have more than quintupled over the period, reaching ₹8,766.37 crores in 2025, supported by rising reserves that climbed from ₹759.92 crores in 2019 to ₹8,247.76 crores in 2025. This reflects strong retained earnings and capital accumulation.

Total debt levels have varied, with a peak in 2024 at ₹670.12 crores before declining to ₹570.56 crores in 2025, suggesting prudent debt management amid expansion.

Cash Flow and Liquidity

Operating cash flow has generally improved, with ₹187 crores generated in 2025 compared to ₹209 crores in 2020, despite some volatility. Investing activities have consistently been cash outflows, reflecting ongoing capital investments. Financing cash flows have been mixed, with a notable outflow of ₹193 crores in 2025, possibly due to debt repayments or dividend payments.

Closing cash and cash equivalents stood at ₹101 crores in 2025, down from ₹193 crores in 2024, indicating a tighter liquidity position but still maintaining a reasonable cash buffer.

Summary and Outlook

Over the past six years, Sunflag Iron has demonstrated consistent revenue growth, improved profitability, and a strengthening balance sheet. The company’s strategic investments and capital expenditure have expanded its asset base substantially, while reserves and shareholder equity have grown robustly. Despite some fluctuations in margins and cash flows, the overall financial health appears solid, supported by manageable debt levels and steady operating cash generation.

Investors analysing Sunflag Iron’s historical performance will note the company’s resilience and capacity to scale operations effectively. The steady increase in earnings per share and book value per share further underline the value creation over time. While the exceptional profit in 2023 distorts some metrics, the underlying trend remains positive, suggesting a well-managed enterprise with growth potential.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →