Manali Petrochemicals Reports Positive Financial Results for Q1 FY25, But Some Concerns Remain

Manali Petrochemicals, a smallcap company in the petrochemical industry, has recently announced its financial results for the quarter ending June 2024. The company has shown positive performance in this quarter, with a significant improvement in its financial score from 5 to 12 in the last 3 months.

One of the key highlights of the financial results is the growth in Profit Before Tax (PBT) by 373.2% to Rs 11.51 crore, compared to the average PBT of the previous four quarters at Rs 2.43 crore. This indicates a very positive trend in the near term for the company. Similarly, the Profit After Tax (PAT) has also shown a growth of 159.0% to Rs 13.02 crore, compared to the average PAT of the previous four quarters at Rs 5.03 crore.

The company’s ability to manage interest payments has also improved, with the Operating Profit to Interest ratio at its highest in the last five quarters at 7.89 times. The Operating Profit (PBDIT) has also shown a positive trend, with the highest value of Rs 20.75 crore in the last five quarters. The Operating Profit Margin has also improved to its highest at 8.63%, indicating an increase in the company’s efficiency.

On the other hand, the company’s interest cost has increased by 26.01% over the previous half-yearly period, which could be a cause for concern. The Net Sales for the quarter has also fallen by -6.8% to Rs 240.42 crore, compared to the average Net Sales of the previous four quarters at Rs 258.09 crore. This shows a negative trend in the near term for the company.

Another area of concern is the high Non-Operating Income, which accounts for 35.59% of the Profit Before Tax (PBT). This indicates that the company’s income from non-business activities is high, which may not be a sustainable business model. Additionally, the Debt-Equity Ratio is at its highest in the last five half-yearly periods, indicating that the company is borrowing more to fund its operations, which could lead to a stressed liquidity situation.

In conclusion, Manali Petrochemicals has shown positive financial performance in the quarter ending June 2024, with improvements in key areas such as PBT, PAT, and Operating Profit. However, there are also some concerns regarding the company’s interest cost, net sales, and non-operating income. Investors are advised to hold their stocks for now, as recommended by MarketsMOJO.