Financial Result for the Quarter and year ended on 31.03.2025
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Corporate Merchant Bankers Ltd reported a sharp swing to profit for FY25, with total income rising to ₹366.96 lakhs from ₹9.70 lakhs in FY24, driven entirely by other income (revenue from operations was nil). Profit before tax stood at ₹288.56 lakhs versus a loss of ₹22.61 lakhs last year, and PAT was ₹216.26 lakhs (FY24 loss of ₹22.61 lakhs), translating to an EPS of ₹0.66. The auditor (J Singh & Associates) issued an unmodified opinion. However, operating cash flow was deeply negative at -₹7,535.94 lakhs because other current assets shot up, and this was funded by fresh borrowings of ₹7,528.42 lakhs. Total assets ballooned to ₹9,697.14 lakhs (from ₹1,874.65 lakhs), largely in 'other non-current assets' alongside non-current borrowings of ₹9,086.74 lakhs. No dividend was recommended.
Despite the headline profit turnaround, the quality of earnings is weak — operations generated no revenue and cash burn from operations was huge, with the company relying on heavy debt (borrowings ~17x equity). Shareholders should view the profit as non-recurring and driven by 'other income'; the surging leverage and negative operating cash flow are red flags for sustainability.