Majestic Auto Reports Impressive Financial Results for Q4 2023, But Non-Business Income Raises Concerns

Majestic Auto, a microcap company in the miscellaneous industry, has recently announced its financial results for the quarter ending December 2023. The company's stock has been given a 'Hold' call by MarketsMOJO.

According to the financials, Majestic Auto has shown outstanding performance in the quarter, with a score of 32, which is an improvement from the previous score of 44 in the last 3 months. The company's Profit Before Tax (PBT) has seen a significant growth of 626.32% Year on Year (YoY) at Rs 2.76 crore. The trend for PBT in the near term is also very positive. Similarly, the Profit After Tax (PAT) has also shown a growth of 596.2% YoY at Rs 7.31 crore, with a positive trend in the near term. The Net Sales for the quarter have also increased by 24.03% YoY at Rs 14.97 crore, with a positive sales trend in the near term.

On the other hand, the company's Debt-Equity Ratio has been the lowest at 0.31 times in the last five half yearly periods, indicating a reduction in borrowing compared to equity capital. However, the company's Non Operating Income for the quarter is 72.97% of PBT, which is a cause for concern as it shows a high income from non-business activities. Additionally, the Non Operating Income for the quarter is the highest at Rs 7.45 crore in the last five quarters, which may not be sustainable in the long run.

Overall, Majestic Auto has shown strong financial performance in the quarter ending December 2023, with positive trends in key areas. However, the company's reliance on non-business income and the sustainability of this income may be a potential risk for investors.