💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue from operations grew by 13.03% YoY, reaching INR 19,618.53 Lakhs in FY25 compared to INR 17,357.05 Lakhs in FY24. Segment-specific growth percentages for Pharmaceuticals and Electronics are not explicitly broken down in the provided snippets.

Geographic Revenue Split

The company operates primarily in India with a foreign subsidiary contributing INR 207.04 Lakhs in revenue, representing approximately 1.05% of total consolidated revenue. The remaining 98.95% is primarily domestic.

Profitability Margins

Gross margins are heavily influenced by 'Purchase of Stock-in-Trade' which accounts for 51.9% of revenue. Profit Before Tax (PBT) margin compressed from 3.62% in FY24 to 2.33% in FY25. Net Comprehensive Income margin stood at 2.29% for FY25.

EBITDA Margin

EBITDA (calculated as PBT + Finance Costs + Depreciation) was INR 1,310.50 Lakhs in FY25 (6.68% margin) compared to INR 1,398.25 Lakhs in FY24 (8.06% margin), showing a contraction of 138 basis points due to higher raw material and employee costs.

Capital Expenditure

The company invested INR 271.88 Lakhs in the purchase of Property, Plant & Equipment and intangible assets during FY25, a slight decrease from INR 291.12 Lakhs in FY24.

Credit Rating & Borrowing

Total borrowings increased to INR 4,858.54 Lakhs in FY25 from INR 4,508.80 Lakhs in FY24. Finance costs rose 13.5% to INR 426.48 Lakhs, reflecting an effective interest cost on average borrowings of approximately 9.1%.

⚙️ Operational Drivers

Raw Materials

Raw materials and components (unspecified types) accounted for INR 1,951.70 Lakhs, representing 9.9% of total revenue.

Raw Material Costs

Raw material consumption costs increased by 28.3% YoY to INR 1,951.70 Lakhs. The company relies heavily on 'Stock-in-Trade' purchases (INR 10,196.49 Lakhs), which grew 22.2% YoY, indicating a shift toward trading or outsourced manufacturing models.

Manufacturing Efficiency

Employee benefit expenses increased by 10.8% to INR 3,070.06 Lakhs, growing slightly slower than revenue (13.03%), suggesting marginal improvements in labor productivity.

📈 Strategic Growth

Expected Growth Rate

13%

Growth Strategy

The company is leveraging its dual presence in Pharmaceuticals and Electronics. Growth is currently driven by a 22.2% increase in stock-in-trade purchases, suggesting a strategy of expanding market reach through trading and distribution rather than just internal manufacturing capacity.

Products & Services

Pharmaceutical products and Electronic components/equipment.

Brand Portfolio

Sarabhai (implied by corporate identity and history).

Market Expansion

The company maintains a foreign subsidiary with assets of INR 560.04 Lakhs, indicating a footprint in international markets, though it currently contributes only ~1% of revenue.

Strategic Alliances

The company operates a Joint Venture which contributed a share of profit of INR 127.45 Lakhs in FY25, a significant turnaround from a loss of INR 271.15 Lakhs in FY24.

🌍 External Factors

Industry Trends

The industry is seeing a shift toward outsourced manufacturing; the company's 22.2% growth in stock-in-trade purchases aligns with this trend, though it subjects the company to higher procurement risk.

Competitive Landscape

Operates in highly fragmented and competitive markets for both generic pharmaceuticals and electronics manufacturing.

Competitive Moat

The company's moat is likely based on its long-standing brand heritage in the Indian pharmaceutical sector and its diversified presence in electronics, though current low margins suggest high competitive intensity.

Macro Economic Sensitivity

Sensitive to interest rate fluctuations as finance costs (INR 426.48 Lakhs) consume 88% of the company's PBT.

Geopolitical Risks

Exposure is limited given that 99% of revenue is domestic, though supply chains for Electronics and Pharma raw materials are often globally linked.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with the Companies Act 2013, Ind AS, and SEBI regulations. It also adheres to pharmaceutical manufacturing standards and electronic waste/manufacturing norms.

Taxation Policy Impact

The company paid net direct taxes of INR 322.30 Lakhs in FY25.

Legal Contingencies

The auditors issued an unmodified opinion, and there were no qualifications or adverse remarks in the CARO reports for the companies included in the consolidation.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the negative cash flow from operating activities, which swung from a positive INR 888.73 Lakhs in FY24 to a negative INR 1,761.52 Lakhs in FY25, a 298% decrease in cash generation efficiency.

Geographic Concentration Risk

High concentration in India (99% of revenue).

Third Party Dependencies

High dependency on third-party suppliers for stock-in-trade, which constitutes over half of the company's revenue base.

Technology Obsolescence Risk

The electronics segment faces high technology obsolescence risk, requiring continuous product updates.

Credit & Counterparty Risk

The company made an allowance for doubtful debts of INR 19.97 Lakhs and doubtful advances of INR 154.83 Lakhs in FY25, indicating some pressure on receivable quality.