How has been the historical performance of TVS Supply?

Revenue and Operating Performance

Over the four-year period ending March 2025, TVS Supply's net sales have remained relatively stable, hovering around ₹9,000 to ₹10,000 crores annually. The company recorded net sales of approximately ₹9,995.72 crores in the fiscal year ending March 2025, marking a 8.6% increase from ₹9,199.98 crores in the previous year. This growth reflects resilience in the company’s core operations despite challenging market conditions.

Operating profit before depreciation and interest (PBDIT) excluding other income showed a modest upward trend, rising from ₹612.57 crores in March 2022 to ₹691.33 crores in March 2025. Operating profit margins have remained fairly consistent, around 6.6% to 7.6%, indicating stable operational efficiency. However, other income has declined from ₹75.63 crores in March 2023 to ₹33.16 crores in March 2025, slightly impacting overall profitability.

Profitability and Margins

Despite steady revenues, TVS Supply’s profitability has been volatile. The company reported a consolidated net profit of ₹39.81 crores in March 2023 but swung to losses in the subsequent years, with a net loss of ₹13.59 crores in March 2025. Earnings per share (EPS) followed a similar pattern, peaking at ₹1.09 in March 2023 before declining to a negative ₹0.31 in March 2025.

The profit before tax (PBT) also reflected this volatility, with a positive ₹41.17 crores in March 2023 but a marginal ₹24.21 crores in March 2025. Tax expenses have fluctuated, occasionally resulting in negative tax adjustments, which further complicate the net profit picture. The operating profit margin excluding other income remained relatively stable, but the net profit margin has been negative in recent years, indicating challenges in converting operating income into bottom-line profits.

Balance Sheet and Financial Position

TVS Supply’s balance sheet reveals significant deleveraging over the years. Long-term borrowings have dramatically reduced from ₹498.59 crores in March 2023 to just ₹2.64 crores in March 2025, reflecting a strong focus on reducing debt. Similarly, total debt has fallen from nearly ₹1,990 crores in March 2023 to zero in March 2025, signalling improved financial health and reduced leverage risk.

Shareholders’ funds have more than doubled from ₹723.56 crores in March 2023 to ₹1,801.77 crores in March 2025, supported by a substantial increase in reserves. The book value per share has also improved significantly, rising from ₹19.86 in March 2023 to ₹40.81 in March 2025, indicating enhanced net asset value per share for investors.

Cash Flow and Liquidity

Cash flow from operating activities has remained robust, with ₹671 crores generated in March 2025, up from ₹127 crores in March 2024. This improvement highlights better working capital management and operational cash generation. However, cash flow from investing activities has been consistently negative, reflecting ongoing capital expenditure and investments in growth initiatives.

Financing activities have seen net outflows in recent years, consistent with the company’s debt reduction strategy. The net cash inflow for March 2025 stood at ₹35 crores, a positive turnaround from the significant outflow of ₹576 crores in March 2024. Closing cash and cash equivalents remain healthy at ₹544 crores, providing a comfortable liquidity buffer.

Summary of Historical Performance

In summary, TVS Supply has demonstrated resilience in maintaining stable revenues and operational margins over the past four years. The company’s strategic focus on debt reduction has strengthened its balance sheet, significantly lowering financial risk. However, profitability has been inconsistent, with recent years showing net losses despite positive operating cash flows. Investors should weigh the company’s solid asset base and improving liquidity against the challenges in sustaining net profitability.

Looking ahead, the company’s ability to convert operational strength into consistent bottom-line growth will be critical. The improved book value per share and reduced leverage provide a foundation for potential recovery, but close monitoring of profit margins and cash flow trends remains essential for informed investment decisions.

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