Fermenta Biotech Reports Strong Financial Performance in Q2 FY25, Debt Management Improves

Fermenta Biotech, a microcap pharmaceutical company, has recently announced its financial results for the quarter ending September 2024. The company has shown a positive performance in this quarter, with a significant improvement in its financial score from -7 to 19 in the last three months.

According to the financial report, Fermenta Biotech has seen a growth of 137.98% in its Profit Before Tax (PBT) less Other Income, which stands at Rs 8.94 crore. The Profit After Tax (PAT) has also shown a growth of 155.9% at Rs 11.38 crore. The company’s Net Sales have increased by 66.98% at Rs 95.03 crore, indicating a positive trend in the near term.

In terms of debt management, Fermenta Biotech has maintained a low Debt-Equity Ratio of 0.43 times, which has been decreasing in the last five half-yearly periods. This shows that the company has been reducing its borrowing in comparison to its equity capital.

The company has also shown a positive trend in its Profit After Tax (PAT) and Earnings per Share (EPS), with the highest values in the last five quarters. This indicates an increase in profitability and higher earnings for shareholders.

However, one area of concern for Fermenta Biotech is its Dividend Payout Ratio (DPR), which is at its lowest at -15.65% in the last five years. This suggests that the company is distributing a lower proportion of its profits as dividends.

In conclusion, Fermenta Biotech has shown a positive financial performance in the quarter ending September 2024, with a significant improvement in its financial score. The company has also been successful in managing its debt and increasing its profitability. However, it needs to work on its dividend distribution to benefit its shareholders. Based on these factors, MarketsMOJO has given a ‘Sell’ call for Fermenta Biotech’s stock.