How has been the historical performance of Vardhman Hold.?

Revenue and Profitability Trends

Examining the net sales figures from March 2019 through March 2025 reveals a volatile revenue trajectory. The company’s net sales peaked notably in March 2022 at ₹33.10 crores, followed by a sharp decline to ₹5.89 crores in March 2023, before recovering to ₹22.77 crores in the latest fiscal year. This volatility suggests exposure to cyclical or sector-specific factors impacting sales volumes or pricing.

Operating profit margins, excluding other income, have generally remained robust, with a high of 90.73% in March 2022 and a recent figure of 72.86% in March 2025. The gross profit margin similarly reflects strong profitability, consistently above 80% in most years except for a dip in March 2023. Operating profit (PBDIT) excluding other income also mirrors these trends, with a peak in March 2022 and a recovery phase thereafter.

Profit before tax has shown considerable fluctuations, with a standout figure in March 2022 at ₹31.87 crores, contrasting with a more modest ₹18.44 crores in March 2025. Tax expenses have varied widely, including a negative tax figure in March 2023, which impacted net profit outcomes. The consolidated net profit, however, is heavily influenced by the company’s share in profit of associates, which has consistently contributed substantial amounts, reaching ₹254.53 crores in March 2025.

Balance Sheet and Asset Quality

Vardhman Hold.’s balance sheet reflects a strong equity base, with shareholder’s funds rising steadily from ₹2,125.68 crores in March 2020 to ₹3,540.46 crores in March 2025. The company maintains a debt-free status, with no long-term or short-term borrowings reported in recent years, underscoring a conservative capital structure.

Non-current investments have grown substantially, from ₹1,979.35 crores in March 2020 to ₹3,527.79 crores in March 2025, indicating a strategic focus on long-term asset accumulation. Current investments have also increased, supporting liquidity alongside cash and bank balances, which, despite some fluctuations, remain modest relative to total assets.

The book value per share has appreciated consistently, rising from ₹6,658.56 in March 2020 to ₹11,090.29 in March 2025, reflecting value accretion for shareholders over the period.

Cash Flow Analysis

Cash flow from operating activities has been mixed, with positive inflows in some years such as March 2021 but negative outflows in others, including the latest fiscal year. Investing activities have seen both inflows and outflows, with a notable outflow in March 2022 followed by inflows in subsequent years. Financing activities have remained relatively stable with minor outflows, consistent with the company’s debt-free position.

Overall, net cash inflows and outflows have varied, with a significant negative cash flow in March 2022 contrasting with positive cash movements in other years. The closing cash and cash equivalents have fluctuated accordingly, indicating active cash management in response to operational and investment needs.

Summary and Outlook

In summary, Vardhman Hold. has experienced a dynamic financial journey characterised by significant swings in revenue and profitability, largely influenced by its associates' performance. The company’s strong balance sheet, absence of debt, and growing reserves provide a solid foundation for future growth. While cash flow patterns suggest some volatility, the overall financial health remains robust.

Investors should note the company’s reliance on associate profits as a key driver of consolidated net profit, which introduces an element of variability. Nonetheless, the consistent increase in book value per share and operating margins indicates underlying operational strength. As the company navigates market cycles, its financial discipline and asset quality position it well for sustained performance.

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