Avantel Ltd announced its financial results for Q4 FY25, presenting a mixed performance across key financial metrics. While the company saw strong revenue growth, it struggled with declining profitability due to increased costs and higher interest expenses.
Key Highlights
The March 2025 quarter saw significant revenue growth, yet escalating costs affected the company’s bottom line, resulting in a sharp decline in net profit.
Financial Performance Breakdown:
Revenue: Increased by 17.81% to ₹491.42 million, compared to ₹417.12 million in Q4 FY24, reflecting strong market demand and operational progress.
Net Profit (PAT): Declined by 43.77% to ₹73.57 million, down from ₹130.83 million in Q4 FY24. The drop in profitability was primarily driven by higher costs and interest expenses.
Operating Profit (PBIDT): Fell by 33.16% year-on-year to ₹130.27 million, indicating pressure on margins despite revenue growth.
Profit Before Depreciation and Tax (PBDT): Dropped by 35.52% to ₹123.72 million, down from ₹191.87 million in the previous year.
Interest Expenses: Increased significantly by 115.46% to ₹6.55 million, putting further strain on profitability.
Depreciation Charges: Rose by 18.31% to ₹28.04 million, contributing to the decline in operating profit.
Avantel Ltd Q4 FY25 Financial Statement (₹ in Million)
| Particulars | Q4 FY25 (₹ Million) | Q4 FY24 (₹ Million) | % Change |
|---|---|---|---|
| Sales | 491.42 | 417.12 | +17.81% |
| Other Income | 4.76 | 4.60 | +3.48% |
| PBIDT | 130.27 | 194.91 | -33.16% |
| Interest | 6.55 | 3.04 | +115.46% |
| PBDT | 123.72 | 191.87 | -35.52% |
| Depreciation | 28.04 | 23.70 | +18.31% |
| PBT | 95.68 | 168.17 | -43.11% |
| PAT | 73.57 | 130.83 | -43.77% |
Year-to-Date (YTD) Performance: FY25 Overview
Looking at the full year (FY25), Avantel Ltd showed moderate improvement in overall sales, but net profit remained relatively flat, reflecting ongoing cost pressures.
Full Year Financial Highlights:
Revenue: Increased by 10.97% year-on-year to ₹2,484.84 million.
Net Profit: Grew by 8.05% to ₹599.16 million, compared to ₹554.51 million in FY24, marking a slight improvement in profitability despite quarterly challenges.
Profitability Under Pressure
Despite solid revenue growth, Avantel Ltd’s profitability faced notable headwinds in Q4 FY25 due to rising expenses. Here’s a closer look:
Profitability Metrics:
Profit Before Tax (PBT): Decreased by 43.11% to ₹95.68 million from ₹168.17 million in Q4 FY24.
Tax Expenses: Provided partial relief as tax provision dropped by 40.79% to ₹22.11 million, helping to cushion the impact on the bottom line.
Analyst’s View: A Mixed Quarter with Challenges Ahead
Avantel Ltd experienced solid revenue growth in Q4 FY25, but the rise in costs and interest expenses significantly hampered profitability. Key insights from the quarter include:
Strengths:
- Strong revenue growth driven by operational progress.
- Modest increase in full-year net profit.
Challenges:
- Increased interest expenses and depreciation charges.
- Substantial decline in operating profit and PBT, highlighting margin pressures.
Investor Insight:
Avantel Ltd’s ability to manage rising costs and interest expenses will be crucial for its future profitability. The company will need to focus on maintaining its revenue growth while optimizing costs and controlling interest expenses to improve profitability in the coming quarters.
The Bottom Line
Avantel Ltd’s Q4 FY25 results showcase strong revenue growth but highlight significant profitability challenges, primarily driven by increased operating costs and higher interest expenses. As the company navigates these headwinds, it will need to address cost pressures effectively to sustain its revenue momentum and improve profitability moving forward.
Disclaimer: This blog is for informational purposes only and should not be considered as financial advice or any buy/sell recommendations.
