Sangam India's Q1 FY25 financials show mixed performance, with positive trends in operating profit and EPS

Sangam India, a smallcap textile company, recently announced its financial results for the quarter ending March 2024. The company has seen a negative performance in this quarter, with a score of -12, which is an improvement from the previous quarter’s score of -24.

Despite the negative performance, there are some positive aspects to Sangam India’s financials. The company’s operating profit (PBDIT) for the quarter was the highest in the last five quarters at Rs 67.32 crore, indicating a positive trend in the near term. The operating profit margin has also improved, reaching its highest at 9.71% in the last five quarters, showing an increase in efficiency.

The company’s profit before tax (PBT) less other income has also grown by 37.1% compared to the average PBT of the previous four quarters. The profit after tax (PAT) for the quarter was the highest in the last five quarters at Rs 15.49 crore, with a positive trend in the near term. The earnings per share (EPS) for the quarter was also the highest in the last five quarters at Rs 2.84, indicating an increase in profitability and higher earnings for shareholders.

However, there are some areas of concern for Sangam India. The interest cost for the half-yearly period has increased by 35.96%, indicating higher borrowings. The debt-equity ratio for the half-yearly period is also at its highest in the last five periods, indicating a higher reliance on borrowing to fund operations. The company’s debtors turnover ratio for the half-yearly period is at its lowest in the last five periods, indicating a slower pace of settling debts. Additionally, the non-operating income for the quarter was the highest in the last five quarters, which may not be sustainable in the long term.

Overall, Sangam India’s financial performance for the quarter ending March 2024 has been mixed, with some positive and negative aspects. Investors should carefully consider these factors before making any investment decisions. MarketsMOJO has given a ‘Strong Sell’ call for the company’s stock based on these financial results.