Indo Rama Synthetics' Q2 financials show mixed results, with potential debt concerns

Indo Rama Synthetics (India), a smallcap textile company, recently announced its financial results for the quarter ending June 2024. According to the data released on August 9, 2024, the company has seen a negative financial performance in this quarter. However, there has been a slight improvement in the company's overall score, which has gone from -14 to -7 in the last three months.

One of the positive aspects of Indo Rama Synthetics' financials for this quarter is its operating profit margin, which is the highest it has been in the last five quarters at 3.10%. This indicates that the company's efficiency has improved.

On the other hand, there are some areas that are not working in favor of Indo Rama Synthetics. The company's interest expenses for the nine-month period have increased by 54.94% to Rs 115.32 crore. This suggests that the company has taken on more borrowings, which could lead to a higher debt burden.

Moreover, the debt-equity ratio for the half-yearly period is at its highest in the last five half-yearly periods at 3.58 times. This ratio has been growing each half-year, indicating that the company is relying more on borrowings to fund its operations. This could potentially lead to a stressed liquidity situation for the company.

Based on these financials, MarketsMOJO has given a 'Strong Sell' call for Indo Rama Synthetics' stock. Investors should carefully consider these factors before making any investment decisions.