Swaraj Engines Limited (SEL), a leading manufacturer of diesel engines and components, has delivered an exceptional financial performance for the fiscal year 2025, culminating in its highest-ever Profit Before Tax (PBT) of Rs. 223.05 crores. The company’s audited financial results for the fourth quarter (Q4 FY25) and the full year ended March 31, 2025, reflect robust growth, driven by strong demand, operational efficiency, and strategic initiatives.
Key Financial Highlights for FY25
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Revenue from Operations: Rs. 1,681.89 crores, up 18.5% YoY from Rs. 1,419.24 crores in FY24.
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Profit Before Tax (PBT): Rs. 223.05 crores, a 20.6% YoY increase from Rs. 184.97 crores.
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Profit After Tax (PAT): Rs. 165.98 crores, up 20.4% YoY from Rs. 137.87 crores.
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Engine Sales Volume: 1,68,820 units, a 21.7% YoY growth from 1,38,761 units.
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Dividend: Recommended at 1045% (Rs. 104.50 per share), up from Rs. 95 per share in FY24.
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Capacity Expansion: Approved expansion from 1,95,000 to 2,40,000 engines per annum, with a Rs. 220 crore investment.
Quarter-on-Quarter (QoQ) Analysis: Q4 FY25 vs. Q3 FY25
The fourth quarter (January–March 2025) showcased significant growth compared to the third quarter (October–December 2024), reflecting strong seasonal demand and operational excellence.
Revenue from Operations
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Q4 FY25: Rs. 454.16 crores
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Q3 FY25: Rs. 345.50 crores
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QoQ Growth: 31.5%
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Analysis: The substantial increase in revenue was driven by a record-high engine sales volume of 45,594 units in Q4 FY25, compared to an estimated lower volume in Q3 (exact Q3 volume not provided but inferred from revenue trends). This surge reflects robust demand from SEL’s key customer, the Swaraj Division of Mahindra & Mahindra Ltd.
Profit Before Tax (PBT)
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Q4 FY25: Rs. 61.22 crores
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Q3 FY25: Rs. 42.82 crores
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QoQ Growth: 43.0%
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Analysis: PBT growth outpaced revenue growth, indicating improved margins. The operating profit margin (PBIT/Revenue) improved to 12.5% in Q4 FY25 from 12.4% in Q3 FY25, driven by economies of scale and controlled cost increases despite a 25.7% QoQ rise in cost of materials consumed (Rs. 35,166 crores vs. Rs. 27,981 crores).
Profit After Tax (PAT)
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Q4 FY25: Rs. 45.42 crores
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Q3 FY25: Rs. 31.95 crores
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QoQ Growth: 42.2%
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Analysis: PAT growth closely mirrored PBT, with a stable effective tax rate of approximately 25.8% in Q4 FY25 (vs. 25.4% in Q3 FY25). The increase in PAT reflects higher operational profits and minimal impact from deferred tax adjustments.
Engine Sales Volume
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Q4 FY25: 45,594 units
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Q3 FY25: Not explicitly stated, but inferred to be lower based on revenue and industry trends.
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Analysis: The 31.5% QoQ revenue growth suggests a significant increase in unit sales, likely driven by peak agricultural demand in Q4, a key season for tractor and engine sales in India.
Key Expenses
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Cost of Materials Consumed: Increased by 25.7% QoQ (Rs. 35,166 crores vs. Rs. 27,981 crores), in line with higher production volumes.
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Other Expenses: Rose by 25.0% QoQ (Rs. 2,188 crores vs. Rs. 1,750 crores), reflecting higher operational activity.
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Employee Benefits Expense: Remained stable at Rs. 1,150 crores in Q4 vs. Rs. 1,159 crores in Q3, indicating controlled labor costs despite increased output.
Year-on-Year (YoY) Analysis: FY25 vs. FY24
The full-year performance underscores SEL’s consistent growth trajectory, with significant improvements across key financial metrics.
Revenue from Operations
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FY25: Rs. 1,681.89 crores
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FY24: Rs. 1,419.24 crores
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YoY Growth: 18.5%
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Analysis: The 18.5% revenue growth was fueled by a 21.7% increase in engine sales volume (1,68,820 units vs. 1,38,761 units). This reflects strong market demand and SEL’s ability to capture a larger share of the agricultural engine market.
Profit Before Tax (PBT)
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FY25: Rs. 223.05 crores
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FY24: Rs. 184.97 crores
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YoY Growth: 20.6%
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Analysis: PBT growth was driven by higher revenues and improved operating margins. The PBIT margin remained steady at approximately 13.3% (Rs. 223.05 crores PBT + Rs. 0.33 crores finance costs / Rs. 1,681.89 crores revenue), compared to 13.0% in FY24, reflecting efficient cost management.
Profit After Tax (PAT)
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FY25: Rs. 165.98 crores
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FY24: Rs. 137.87 crores
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YoY Growth: 20.4%
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Analysis: PAT growth aligned with PBT, with a consistent effective tax rate of 25.6% in FY25 (vs. 25.5% in FY24). The increase in PAT underscores SEL’s ability to translate revenue growth into bottom-line gains.
Engine Sales Volume
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FY25: 1,68,820 units
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FY24: 1,38,761 units
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YoY Growth: 21.7%
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Analysis: The significant volume growth reflects strong demand for SEL’s engines, particularly in the tractor segment, bolstered by favorable agricultural conditions and government support for mechanization.
Key Expenses
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Cost of Materials Consumed: Increased by 17.8% YoY (Rs. 131,875 crores vs. Rs. 111,903 crores), proportional to higher production volumes.
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Employee Benefits Expense: Rose by 12.0% YoY (Rs. 4,817 crores vs. Rs. 4,300 crores), reflecting wage inflation and additional staffing for expanded operations.
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Other Expenses: Increased by 19.4% YoY (Rs. 7,969 crores vs. Rs. 6,677 crores), driven by higher operational and logistical costs.
Balance Sheet and Cash Flow Insights
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Total Assets: Grew by 20.7% to Rs. 67,215 crores as of March 31, 2025, from Rs. 55,680 crores in FY24, driven by a 46.2% increase in non-current assets (Rs. 19,376 crores vs. Rs. 13,571 crores) due to investments in property, plant, and equipment (PPE).
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Cash and Cash Equivalents: Increased to Rs. 656 crores from Rs. 418 crores, supported by strong operating cash flows of Rs. 17,667 crores (up 24.1% YoY).
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Other Equity: Rose by 13.6% to Rs. 40,705 crores from Rs. 35,842 crores, reflecting retained earnings growth despite a higher dividend payout of Rs. 11,540 crores (vs. Rs. 11,174 crores in FY24).
Strategic Expansion and Dividend
SEL’s Board approved a significant capacity expansion plan, increasing annual engine production capacity from 1,95,000 to 2,40,000 units. The Rs. 220 crore investment, funded through internal cash generation, will establish a new advanced technology assembly line and expand the machine shop over 24–27 months. This initiative aims to meet future demand and enable production of modern technology engines, aligning with customer specifications.
The Board also recommended a dividend of 1045% (Rs. 104.50 per share), a significant increase from Rs. 95 per share in FY24, signaling confidence in SEL’s financial health and commitment to shareholder value.
Conclusion
Swaraj Engines Limited’s FY25 performance reflects its strong market position and operational excellence. The company achieved record-high revenues, profits, and engine sales, with notable QoQ and YoY growth in key segments. The strategic capacity expansion and robust dividend payout underscore SEL’s forward-looking approach and financial strength. As SEL continues to capitalize on India’s agricultural mechanization trend, it is well-positioned for sustained growth in the coming years.