Chemplast Sanmar's Q1 financials show growth in PBT and PAT, but concerns remain

Chemplast Sanmar, a midcap chemical company, has recently declared its financial results for the quarter ending June 2024. The company has received a 'Hold' call from MarketsMOJO, indicating a neutral stance on its stock.

According to the financials, Chemplast Sanmar has shown a flat performance in the quarter, with a slight improvement in its score from -13 to -4 in the last three months. However, there are some positive aspects to the company's financials.

The Profit Before Tax (PBT) has seen a significant growth of 127.1% at Rs 20.73 crore, compared to the average PBT of the previous four quarters at Rs -76.51 crore. The Profit After Tax (PAT) has also shown a growth of 160.3% at Rs 23.89 crore, compared to the average PAT of the previous four quarters at Rs -39.61 crore. This indicates a positive trend in the near term for the company.

The company's ability to manage interest payments has also improved, with the Operating Profit to Interest ratio being the highest in the last five quarters at 2.12 times. The Net Sales for the quarter have also been the highest in the last five quarters at Rs 1,144.89 crore, showing a positive trend in the near term. The Operating Profit (PBDIT) has also been the highest at Rs 124.09 crore, indicating a positive trend in the near term.

The company's efficiency has also improved, with the Operating Profit Margin being the highest at 10.84% in the last five quarters. The Profit Before Tax (PBT) has also been the highest at Rs 20.73 crore in the last five quarters, showing a positive trend in the near term.

However, there are some areas of concern for Chemplast Sanmar. The Operating Cash Flow has been the lowest at Rs -244.93 crore and has fallen each year in the last three years. This indicates a decline in the company's cash revenues from business operations. The Debt-Equity Ratio has also been the highest at 0.91 times and has grown each half year in the last five periods. This suggests that the company is borrowing more to fund its operations, which may lead to a stressed liquidity situation.

The Interest cost has also been on the rise, with a 15.11% increase (QoQ) and the highest at Rs 58.65 crore in the last five quarters. This signifies an increase in borrowings by the company. The Non-Operating Income has also been high at 35.68% of the Profit Before Tax (PBT), indicating a reliance on non-business activities for income, which may not be sustainable in the long run.

The company's short-term liquidity has also deteriorated, with the Cash and Cash Equivalents being the lowest at Rs 801.19 crore in the last six half-yearly periods. Additionally, the Debtors Turnover Ratio has been the lowest at 20.64 times in the last five half-yearly periods, indicating a slowdown in the company's pace of settling its debtors.

Overall, Chemplast Sanmar has shown a mixed performance in the quarter ending June 2024. While there are some positive aspects to its financials, there are also some areas of concern that the company needs to address in order to improve its overall performance.