Revenue and Profitability Trends
For the year ended March 2025, Tolins Tyres reported consolidated net sales of ₹292.45 crores, a substantial rise from ₹227.22 crores recorded in the previous fiscal year. This growth of nearly 29% underscores the company’s expanding market presence and demand for its tyre products. Total operating income mirrored this trend, with no other operating income reported in either year.
However, the increase in revenue was accompanied by a notable rise in raw material costs, which surged from ₹175.91 crores to ₹255.00 crores. Despite this, the company managed to improve its operating profit (PBDIT) excluding other income to ₹55.76 crores, up from ₹46.26 crores, reflecting effective cost management and operational efficiency. Including other income, operating profit rose to ₹58.32 crores compared to ₹47.85 crores the previous year.
Interest expenses were significantly reduced to ₹5.83 crores from ₹11.58 crores, contributing to a higher gross profit before depreciation and tax of ₹52.49 crores, up from ₹36.27 crores. Profit before tax increased by 50% to ₹49.35 crores, while profit after tax rose to ₹38.68 crores from ₹26.01 crores, marking a healthy improvement in net profitability. Earnings per share (EPS) also improved to ₹9.79 from ₹8.48, indicating enhanced shareholder returns.
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Operating Margins and Expense Analysis
The operating profit margin excluding other income stood at 19.07% for March 2025, slightly lower than the 20.36% margin in the previous year. This marginal contraction is attributable to the sharp rise in raw material costs and increased employee expenses, which nearly doubled to ₹13.29 crores. Other expenses also increased moderately to ₹12.58 crores from ₹9.91 crores. Despite these pressures, the gross profit margin improved to 17.95% from 15.96%, reflecting better pricing power or product mix.
The company reported no power, manufacturing, or selling and distribution expenses in either year, suggesting a streamlined cost structure focused on core production and administrative costs.
Balance Sheet Strength and Capital Structure
Tolins Tyres’ balance sheet shows marked improvement in shareholder funds, which more than tripled to ₹324.43 crores from ₹100.53 crores, driven by increased equity capital and reserves. Equity capital rose to ₹19.75 crores from ₹15.33 crores, while reserves surged significantly, reflecting retained earnings and capital infusion.
The company has successfully reduced its total debt from ₹78.77 crores to ₹16.74 crores, with long-term borrowings dropping sharply from ₹8.80 crores to ₹0.71 crores and short-term borrowings declining from ₹69.97 crores to ₹16.03 crores. This deleveraging enhances financial stability and reduces interest burden, as reflected in the lower interest expenses.
On the asset side, total assets increased to ₹369.75 crores from ₹221.60 crores, supported by growth in current assets such as inventories and sundry debtors. Inventories rose to ₹139.35 crores from ₹83.84 crores, and sundry debtors increased to ₹102.67 crores from ₹64.00 crores, indicating higher production and sales volumes. Cash and bank balances improved markedly to ₹55.55 crores from ₹2.67 crores, strengthening liquidity.
Cash Flow and Working Capital Dynamics
Despite strong profitability, Tolins Tyres faced challenges in cash flow management. Cash flow from operating activities was negative at ₹61.00 crores compared to a marginal negative ₹3.00 crores the previous year, largely due to a significant increase in working capital requirements. Changes in working capital amounted to a ₹104.00 crore outflow, more than double the previous year’s ₹49.00 crore, reflecting higher inventory and receivables build-up.
Investing activities continued to consume cash, though at a reduced level of ₹28.00 crores versus ₹54.00 crores earlier. Financing activities provided a substantial inflow of ₹117.00 crores, nearly doubling from ₹57.00 crores, which helped the company maintain a positive net cash inflow of ₹27.00 crores and close the year with ₹28.00 crores in cash and equivalents.
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Summary of Historical Performance
Overall, Tolins Tyres has exhibited strong growth in revenue and profitability over the last fiscal year, supported by improved operational efficiency and a healthier capital structure. The company’s ability to reduce debt and increase shareholder funds while expanding its asset base is a positive indicator of financial health. However, the rising working capital requirements and negative operating cash flow highlight areas that require close monitoring to ensure sustainable cash generation.
With an improved earnings per share and a book value per share rising to ₹82.12 from ₹32.79, Tolins Tyres presents a compelling case for investors seeking exposure to the tyre manufacturing sector. The company’s focus on deleveraging and strengthening liquidity positions it well for future growth opportunities, although managing inventory and receivables efficiently will be critical to maintaining financial stability.
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