De Neers Tools Limited — Important, 19-02-2025: Updates

Revenue performance has been robust, with the company achieving around INR 105 crore in the first nine months of FY25, nearly matching the total FY24 revenue, indicating strong momentum. Profitability metrics show significant improvements: gross margins have expanded by approximately 500 bps to 27.6%, and EBITDA reached about INR 20 crore, with EBITDA margins increasing by 700 bps to 19.6%. Additionally, PAT grew over 45% to above INR 12 crore, with a PAT margin enhancement of around 480 bps to 12.1%.

Operational excellence has led to improved returns, with ROE rising to 20.3% in 9MFY25 from 13.0% in FY23. Working capital optimization reflects in inventory holding periods reducing to 245 days, while the receivables cycle improved to around 90 days from over 125 days the previous year. Positive cash flow of over INR 28 crore in 9MFY25 marks a turning point from a cash outflow of INR 25 crore in FY23.

The strategic expansion into the Middle East is on track to commence revenue generation in Q4FY25, contributing to diversified revenue streams and opportunities. Maintain a positive outlook as the company focuses on margin improvements, working capital efficiency, and strengthening its market leadership.