Nilkamal Reports Strong FY24 Revenue Growth, Debt Reduction

Key Financials for FY24

Nilkamal Limited announced its full-year financial results for FY24, revealing consolidated revenue of ₹3,792.48 crore, a 14.08% increase compared to the previous year. Net profit for the year stood at ₹116.07 crore.

In the fourth quarter of FY24, the company reported revenue of ₹968.98 crore and a net profit of ₹41.69 crore. For the full fiscal year, net profit saw an 8.68% rise year-on-year.

Debt Slashed, Margins Pressured

The company highlighted significant progress in deleveraging its balance sheet, with net borrowings reduced to ₹181 crore as of March 31, 2024, down from ₹272 crore in FY23. This debt reduction enhances the company's financial resilience.

However, profit margins were impacted by several factors. A one-time charge of ₹15.41 crore was recognized due to incremental gratuity and leave liabilities stemming from the implementation of new labour codes.

Additionally, Nilkamal faces challenges from a substantial increase in raw material prices, which have risen by an estimated 50% due to geopolitical volatility. This cost pressure contributed to annual net profit growth lagging behind revenue growth.

Company Background and Investor Focus

Nilkamal, an Indian leader in furniture and material handling solutions, is now focused on managing these rising costs and compliance considerations. Investors will be watching how the company navigates raw material price volatility and integrates new labour code-related liabilities.

Shareholders are set to benefit from a proposed final dividend of ₹20 per share.

Peer Comparison

In comparison, peer Supreme Industries Ltd reported FY23-24 revenue of approximately ₹11,287 crore. Godrej Consumer Products Ltd, with a diversified portfolio, posted FY23-24 revenue around ₹13,034 crore and a net profit of ₹2,308 crore.

Outlook

Looking ahead, investors will track management's commentary on raw material cost trends, mitigation strategies, and the company's ability to pass on increased costs without affecting sales volumes.