Hindustan Oil Exploration Company reports negative performance in Q2 FY25 financials.

Hindustan Oil Exploration Company (Hind.Oil Explor.) recently announced its financial results for the quarter ending September 2024. The company, which operates in the oil exploration and refineries industry, is classified as a smallcap company.

According to the financial report, Hind.Oil Explor. has seen a very negative performance in the second quarter of the fiscal year 2024-25. The company’s score has fallen from -14 to -21 in the last three months.

However, there are some positive aspects to the company’s financials. The debt-equity ratio for the half-yearly period is at its lowest at 0.12 times and has been decreasing in the last five half-yearly periods. This indicates that the company has been reducing its borrowing in comparison to its equity capital.

Additionally, the company’s cash and cash equivalents for the half-yearly period are at their highest at Rs 136.21 crore in the last six half-yearly periods. This shows that the company’s short-term liquidity is improving.

On the other hand, there are some concerning factors in Hind.Oil Explor.’s financials. The net sales for the quarter have fallen by 47.2% to Rs 94.81 crore, which is significantly lower than the average net sales of the previous four quarters at Rs 179.42 crore. This indicates a very negative trend in the company’s near-term sales.

Similarly, the profit before tax less other income (PBT) for the quarter has fallen by 79.7% to Rs 8.64 crore, which is also lower than the average PBT of the previous four quarters at Rs 42.64 crore. This shows a very negative trend in the company’s near-term PBT.

The same trend can be seen in the company’s profit after tax (PAT) for the quarter, which has fallen by 75.3% to Rs 10.81 crore, compared to the average PAT of the previous four quarters at Rs 43.76 crore. The operating profit to interest ratio is also at its lowest in the last five quarters, indicating a deteriorating ability to manage interest payments.

Furthermore, the non-operating income for the quarter is 35.57% of the PBT, which suggests that the company’s income from non-business activities is high and not a sustainable business model.

Lastly, the earnings per share (EPS) for the quarter are at their lowest at Rs 0.82 in the last five quarters, indicating a decline in profitability and lower earnings for shareholders.

Based on these financials, MarketsMOJO has given a ‘Sell’ call for Hind.Oil Explor.’s stock. Investors should carefully consider these factors before making any investment decisions.