How has been the historical performance of Worth Peripheral?

Revenue and Profitability Trends

Over the seven-year period ending March 2025, Worth Peripheral’s net sales exhibited notable volatility. The company recorded a peak in sales in FY2023, reaching close to ₹298 crores, followed by a decline in FY2024 to approximately ₹238 crores, before rebounding to nearly ₹276 crores in FY2025. This fluctuation suggests sensitivity to market conditions or operational factors impacting sales volumes or pricing.

Despite these sales variations, the company maintained a relatively stable operating profit margin, excluding other income, which ranged between 9.0% and 13.8%. The margin peaked in FY2020 at 13.76% but saw a gradual decline to 10.1% by FY2025. Gross profit margins followed a similar pattern, with a high of 14.7% in FY2021 and a more recent figure of 11.07% in FY2025, indicating some pressure on cost efficiency or pricing power.

Profit after tax (PAT) margins also reflected this trend, decreasing from 8.74% in FY2020 to 6.29% in FY2025. Consolidated net profit mirrored this pattern, peaking at over ₹19 crores in FY2022 before easing to ₹15.43 crores in FY2025. Earnings per share (EPS) followed suit, with a high of 12.15 in FY2022 and a recent figure of 9.8 in FY2025, signalling a modest contraction in shareholder returns.

Cost Structure and Expenditure

Raw material costs have consistently represented the largest expenditure, rising from around ₹134 crores in FY2019 to ₹203 crores in FY2025. This increase aligns with sales growth but also reflects rising input costs. Employee costs have shown a steady increase, reaching nearly ₹17 crores in FY2025 from ₹11 crores in FY2020, indicating investment in human resources. Other expenses have also trended upwards, reaching ₹28.79 crores in FY2025, which may warrant closer scrutiny for cost control.

Interest expenses have remained relatively low and stable, fluctuating between ₹1.04 crores and ₹2.20 crores over the period, supporting a manageable debt servicing profile. Depreciation charges have increased moderately, consistent with asset base expansion.

Balance Sheet and Asset Management

Worth Peripheral’s total assets have grown steadily from ₹139 crores in FY2020 to ₹230 crores in FY2025, reflecting ongoing capital investment and business expansion. Net block values indicate consistent capital expenditure, with gross block rising from ₹92 crores to ₹124 crores over the same period. The company’s reserves and shareholder funds have shown robust growth, with reserves increasing from ₹76 crores in FY2020 to ₹158 crores in FY2025, and shareholder’s funds rising to nearly ₹174 crores, underscoring strengthened equity capitalisation.

Debt levels have fluctuated, with total debt peaking near ₹20.6 crores in FY2020, dropping sharply in FY2023 to under ₹3 crores, before rising again to ₹19 crores in FY2022 and settling at ₹19 crores in FY2025. This pattern suggests active debt management and refinancing efforts. The company’s book value per share has improved significantly, from ₹58.39 in FY2020 to ₹110.42 in FY2025, indicating enhanced net asset value per share.

Cash Flow Dynamics

Cash flow from operating activities has generally improved, reaching ₹21 crores in FY2025 compared to ₹17 crores in FY2020, despite some year-on-year volatility. Investing activities have consistently reflected cash outflows, indicative of ongoing capital expenditure and asset acquisition. Financing activities have varied, with positive inflows in recent years supporting liquidity. The net cash inflow in FY2025 was ₹2 crores, a modest improvement over previous years, contributing to a stronger cash and bank balance of ₹69 crores.

Summary and Outlook

In summary, Worth Peripheral has experienced a period of fluctuating sales and profitability, with a peak in revenue and earnings around FY2022-23 followed by some moderation. The company’s ability to maintain positive operating margins and grow shareholder equity is a positive indicator of financial health. However, the recent dip in profit margins and EPS suggests challenges that may require strategic focus on cost management and revenue stability.

Asset growth and improved book value per share reflect a solid foundation, while cash flow trends indicate prudent liquidity management. Investors should weigh these factors alongside market conditions and sector dynamics when considering Worth Peripheral’s future prospects.

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