Sarup Ind Q4 Net Profit Soars 291% to ₹0.43 Cr, FY25 Turns Profitable

Sarup Industries Ltd. announced its audited standalone financial results for the fourth quarter and full year ended March 31, 2025, showcasing a remarkable turnaround in profitability. For Q4 FY25, the company reported a net profit of ₹0.43 crore, a significant surge of 291.35% year-on-year (YoY) from ₹0.11 crore in the corresponding quarter of the previous fiscal. Sequentially, the net profit jumped 236.82% from ₹0.13 crore in Q3 FY25. The company's total income for Q4 FY25 also rose by 27.21% YoY to ₹4.89 crore.

Detailed Financial Performance

Quarterly Performance (Q4 FY25 vs Q4 FY24 and Q3 FY25)

In the fourth quarter of FY25, Sarup Industries' total income from operations stood at ₹4.89 crore, up from ₹3.85 crore in Q4 FY24 and ₹4.69 crore in Q3 FY25. This income comprised ₹4.85 crore from net sales, ₹0.02 crore from other operating income, and ₹0.02 crore from other income.

Total expenses for Q4 FY25 were ₹4.67 crore, compared to ₹3.62 crore in Q4 FY24 and ₹4.56 crore in Q3 FY25. Key expense components for the quarter included Cost of Materials Consumed at ₹2.02 crore, Employee Benefits Expense at ₹1.10 crore, and Other Expenses at ₹1.03 crore.

Profit Before Tax (PBT) for Q4 FY25 was ₹0.23 crore, a slight increase from ₹0.23 crore in Q4 FY24, but a substantial rise from ₹0.13 crore in Q3 FY25. The company reported a tax credit (negative tax expense) of ₹0.20 crore for Q4 FY25, compared to a tax expense of ₹0.12 crore in Q4 FY24. This tax credit significantly boosted the net profit for the quarter.

Annual Performance (FY25 vs FY24)

For the full financial year ended March 31, 2025, Sarup Industries marked a significant turnaround, posting a consolidated net profit of ₹4.79 crore. This is a substantial improvement from a net loss of ₹1.70 crore reported in FY24.

Total income from operations for FY25 grew by 38.03% YoY to ₹16.03 crore from ₹11.61 crore in FY24. This growth was supported by an increase in net sales to ₹15.97 crore.

A key highlight for FY25 was an exceptional item of ₹4.14 crore (gain). This gain arose from "Property, plant and equipment Scrapped/Written Off" and significantly contributed to the year's profitability. Profit Before Tax (PBT), including the exceptional item, stood at ₹4.59 crore for FY25, compared to a Loss Before Tax of ₹1.59 crore in FY24.

Total expenses for FY25 amounted to ₹15.57 crore, up from ₹13.20 crore in the previous year. Major expenses included Cost of Materials Consumed at ₹6.25 crore, Employee Benefits Expense at ₹3.82 crore, Finance Costs at ₹1.36 crore, and Depreciation and Amortisation Expense at ₹0.51 crore.

Similar to the quarter, the company reported a tax credit of ₹0.20 crore for the full year FY25, compared to a tax expense of ₹0.12 crore in FY24.

Segment Reporting

Sarup Industries operates in a single business segment, which is the manufacturing of shoes and shoe uppers. Therefore, segment-wise reporting is not applicable beyond these consolidated figures.

Balance Sheet Analysis (as of March 31, 2025)

As of March 31, 2025, Sarup Industries' total assets stood at ₹65.71 crore, a slight increase from ₹65.45 crore as of March 31, 2024.

The company's equity position, while still negative, showed improvement. Total equity (or net worth) was -₹3.01 crore as of March 31, 2025, compared to -₹7.78 crore a year ago. This improvement was driven by the profits earned during the year. The Equity Share Capital remained constant at ₹3.25 crore, while Other Equity improved from -₹11.03 crore to -₹6.26 crore.

On the liabilities side, total non-current liabilities decreased to ₹37.94 crore from ₹38.69 crore YoY, primarily comprising borrowings of ₹35.93 crore. Current liabilities increased to ₹30.78 crore from ₹29.02 crore YoY, with trade payables at ₹17.00 crore and other current liabilities at ₹10.85 crore.

Cash Flow Highlights (FY25)

For the financial year 2025, Sarup Industries generated net cash from operating activities of ₹1.61 crore, a significant decrease from ₹15.01 crore in FY24. This reduction was mainly due to movements in working capital.

Net cash from investing activities was ₹5.99 crore in FY25, a stark contrast to net cash used in investing activities of ₹16.23 crore in FY24. The positive cash flow in FY25 was primarily due to proceeds from the sale of property, plant, and equipment amounting to ₹5.99 crore, which is linked to the exceptional gain item.

Net cash used in financing activities stood at ₹7.56 crore in FY25, compared to net cash from financing activities of ₹1.55 crore in FY24. This outflow in FY25 was mainly due to repayment of borrowings and interest payments.

Overall, there was a net increase in cash and cash equivalents by ₹0.04 crore during FY25, with closing cash and cash equivalents at ₹0.76 crore as of March 31, 2025.

Earnings Per Share (EPS)

The Basic and Diluted Earnings Per Share (EPS) for Q4 FY25 stood at ₹1.31, a significant improvement from ₹0.33 in Q4 FY24 and ₹0.39 in Q3 FY25.

For the full year FY25, the EPS was ₹14.72, marking a strong recovery from a negative EPS of -₹5.24 in FY24. This reflects the company's return to profitability, aided by the exceptional gain.

Auditor's Report Insights

The statutory auditors, M/s Y.K. SUD & CO., Chartered Accountants, issued an unmodified opinion on the standalone financial results for the quarter and year ended March 31, 2025. The auditors drew attention to the following Emphasis of Matter paragraphs without qualifying their opinion:

1. Conversion of Capital Work-in-Progress (CWIP) to Stock-in-Trade: The auditors highlighted a Board Resolution from May 30, 2023, regarding the conversion of Capital WIP (Mall under Construction) in Jalandhar, amounting to ₹16.20 crore (₹1619.63 lakh), into Stock-in-Trade. Consequently, the company's inventories as of March 31, 2025, include this amount, and there is no Capital WIP reported on the balance sheet as of that date.
2. Interest Paid to Related Parties: It was noted that out of the total interest paid by the company during FY25, amounting to ₹1.35 crore (₹134.91 lakh as per auditor's note, ₹135.89 lakh as per P&L finance cost), a sum of ₹0.90 crore (₹90.24 lakh) was paid to related parties.

The financial results were approved by the Board of Directors in their meeting held on May 29, 2025, following a review by the Audit Committee.

Concluding Remarks

Sarup Industries has demonstrated a significant financial turnaround in FY25, moving from a net loss to a substantial net profit, largely influenced by an exceptional gain. The quarterly performance also shows strong momentum. The improvement in net worth and the strategic reclassification of assets indicate ongoing efforts to strengthen the company's financial position. Investors will be watching to see if the company can sustain this profitability and operational efficiency in the coming periods.