How has been the historical performance of Tuni Text. Mills?

Revenue and Profitability Trends

Over the seven-year period ending March 2025, Tuni Text. Mills’ net sales have shown a significant upward trend, increasing from ₹34.75 crores in 2019 to ₹76.50 crores in 2025. This represents more than a doubling of sales, with particularly strong growth observed between 2021 and 2025. The total operating income mirrored this pattern, reflecting the company’s ability to expand its core business operations consistently.

Operating profit before depreciation, interest, and tax (PBDIT) excluding other income rose from ₹1.13 crores in 2019 to ₹2.61 crores in 2025, indicating improved operational efficiency. The operating profit margin, however, has fluctuated modestly, peaking at 5.05% in 2021 before settling at 3.41% in 2025. This suggests some pressure on margins despite revenue growth, likely due to rising costs or competitive market conditions.

Profit after tax (PAT) has also improved, moving from a modest ₹0.16 crores in 2019 to ₹0.57 crores in 2025. Notably, the company experienced a loss in 2020, reflecting the impact of broader economic disruptions, but has since returned to profitability. The PAT margin has remained below 1%, indicating that while profits are growing, they remain relatively thin compared to sales.

Cost Structure and Expenses

The company’s cost of goods sold is dominated by the purchase of finished goods, which rose from ₹23.36 crores in 2019 to ₹70.10 crores in 2025, reflecting the scale of operations. Raw material costs have remained relatively low in comparison, indicating a business model reliant on finished goods procurement rather than raw material processing. Employee costs have been stable, averaging around ₹2.4 crores in recent years, while other expenses have decreased from over ₹4 crores in 2019 and 2020 to just above ₹2 crores in 2025, suggesting improved cost control.

Despite these efforts, total expenditure excluding depreciation has increased in line with sales, reaching ₹73.89 crores in 2025. The company has managed to maintain a positive operating profit, but the narrow margins highlight the competitive pressures in the textile industry.

Balance Sheet and Financial Position

Tuni Text. Mills’ shareholder funds have grown steadily from ₹12.38 crores in 2021 to ₹13.96 crores in 2025, supported by a gradual improvement in reserves from negative territory to a positive ₹0.78 crores. The company’s total liabilities have increased to ₹43.59 crores in 2025, with a notable rise in short-term borrowings to ₹16.19 crores, indicating a reliance on working capital financing. Long-term borrowings have decreased from ₹3.45 crores in 2022 to ₹0.58 crores in 2025, reflecting some deleveraging efforts.

On the asset side, net block value has declined from ₹2.09 crores in 2020 to ₹0.75 crores in 2025, suggesting limited capital expenditure or asset sales. Current assets have increased to ₹41.31 crores, driven by rising inventories and sundry debtors, which may point to higher stock levels and receivables as sales expand. The company’s book value per share has improved modestly, reaching approximately ₹0.75 in 2025.

Cash Flow and Liquidity

Cash flow from operating activities has been somewhat volatile, with negative cash flow in 2024 and 2025, reflecting working capital pressures. Financing activities have provided positive cash inflows in recent years, indicating the company’s dependence on external funding to support operations. Investing activities have remained neutral, with no significant capital investments recorded. The company’s cash and bank balances remain minimal, underscoring tight liquidity conditions.

Summary and Outlook

In summary, Tuni Text. Mills has shown consistent growth in sales and profitability over the past several years, recovering well from a loss in 2020. The company’s financial health is marked by stable shareholder funds and a manageable debt profile, although short-term borrowings have increased to support working capital needs. Margins remain thin, reflecting the competitive nature of the textile industry and cost pressures. Cash flow challenges highlight the importance of efficient working capital management going forward.

Investors considering Tuni Text. Mills should weigh its steady revenue growth and improving profitability against the modest margins and liquidity constraints. The company’s historical performance suggests resilience and gradual improvement, but ongoing monitoring of cost control and debt levels will be crucial for sustained success.

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