Kilitch Drugs reports positive financial results for Q2 FY25, with growth in key areas

Kilitch Drugs (India), a microcap pharmaceutical company, has recently announced its financial results for the quarter ending September 2024. The company has shown positive performance in this quarter, with a score of 7 compared to -22 in the previous quarter. This improvement can be attributed to various factors.

One of the key highlights of the financial results is the growth in Profit Before Tax (PBT) and Profit After Tax (PAT). PBT has grown by 106.4% to Rs 5.19 crore, while PAT has grown by 174.1% to Rs 8.62 crore, compared to the average of the previous four quarters. This indicates a positive trend in the company’s profitability in the near term.

Another positive aspect is the company’s ability to manage interest payments, with an Operating Profit to Interest ratio of 19.65 times, the highest in the last five quarters. This shows that the company’s financial health is improving.

The company has also shown growth in its net sales, with the highest quarterly net sales of Rs 47.47 crore in the last five quarters. This is a 25.5% increase compared to the average of the previous four quarters, indicating a positive trend in sales.

On the other hand, there are some areas that need improvement for Kilitch Drugs. The company’s Operating Cash Flow has been falling each year in the last three years, with the lowest at Rs -0.15 crore. This indicates a decline in cash revenues from business operations.

Additionally, the company’s Non Operating Income is 49.86% of PBT, which is a cause for concern as it shows a high reliance on non-business activities for income. The company’s short-term liquidity is also deteriorating, with the lowest cash and cash equivalents of Rs 6.28 crore in the last six half-yearly periods.

Furthermore, the company’s pace of settling its debtors has slowed, with the lowest Debtors Turnover Ratio of 2.20 times in the last five half-yearly periods. Lastly, the company’s Non Operating Income has increased significantly in the last five quarters, which may not be sustainable in the long run.

In conclusion, Kilitch Drugs has shown positive financial performance in the quarter ending September 2024, with improvements in key areas such as PBT, PAT, and net sales. However, there are also some areas that need attention for the company to sustain its growth in the long term. Investors should carefully consider these factors before making any investment decisions.