Declining Financial Performance for Ambika Cotton Mills in Q3 2024

Ambika Cotton Mills, a microcap textile company, recently declared its financial results for the quarter ending September 2024. The company's stock has been given a 'Sell' call by MarketsMOJO, indicating a negative outlook for the company's performance.

According to the financial report, Ambika Cotton has seen a decline in its financial performance for the quarter, with a score of -6 compared to 1 in the previous quarter. However, there are some positive aspects to the company's financials. The debt-equity ratio for the last five half-yearly periods has been the lowest at 0.00 times, indicating that the company has been reducing its borrowing in comparison to its equity capital. Additionally, the company has been distributing higher dividends from its profits, with the dividend per share (DPS) being the highest at Rs 35.00 in the last five years. The dividend payout ratio (DPR) has also been the highest at 31.82%, indicating that the company is distributing a higher proportion of its profits as dividends.

On the other hand, there are some concerning aspects to Ambika Cotton's financials. The operating cash flow for the last three years has been falling, with the latest annual figure being the lowest at Rs -137.75 Cr. The profit after tax (PAT) for the quarter has also fallen by -11.7% compared to the average of the previous four quarters. The operating profit (PBDIT) for the quarter has been the lowest in the last five quarters, and the operating profit margin has also deteriorated. The profit before tax (PBT) has also been the lowest in the last five quarters, with non-operating income being a significant portion of the PBT. This may not be a sustainable business model, as the non-operating income has been increasing and may not continue to do so in the future.

In conclusion, Ambika Cotton Mills has seen a decline in its financial performance for the quarter ending September 2024. While there are some positive aspects to the company's financials, there are also some concerning trends that investors should consider before making any investment decisions.