Superhouse Ltd's Financial Performance Shows Negative Trend, MarketsMOJO Gives 'Sell' Call

Superhouse Ltd, a microcap company in the leather industry, recently declared its financial results for the quarter ending December 2023. According to the report, the company's performance has been very negative, with a score of -23 compared to -11 in the previous quarter.

Despite this, there are some positive aspects to Superhouse Ltd's financials. The company's cash and cash equivalents have increased to Rs 76.84 crore in the last six half-yearly periods, indicating an improvement in short-term liquidity.

However, there are several areas where Superhouse Ltd's performance has been lacking. The net sales for the quarter have fallen by 20.4% compared to the average of the previous four quarters. This trend is expected to continue in the near term.

The company's profit before tax (PBT) has also seen a significant decline of 123.0% compared to the average of the previous four quarters. Similarly, the profit after tax (PAT) has fallen by 63.5% in the same period. The operating profit to interest ratio has also reached its lowest point in the last five quarters, indicating a deterioration in the company's ability to manage interest payments.

Moreover, the net sales and operating profit for the quarter have also reached their lowest points in the last five quarters, while the operating profit margin has decreased to 4.47%. This suggests a decline in the company's efficiency.

Another concerning aspect is the high non-operating income, which is 152.17% of the PBT. This indicates that the company's income from non-business activities is high, which may not be a sustainable business model.

Additionally, the debtors turnover ratio has also decreased to 3.74 times in the last five half-yearly periods, indicating a slower pace of settling debts. The company's non-operating income has also increased significantly in the last five quarters, which may not be sustainable in the long run.

In conclusion, Superhouse Ltd's financial performance for the quarter ending December 2023 has been very negative. While there are some positive aspects, the overall trend is concerning and investors should take note of the company's declining performance. Based on this, MarketsMOJO has given a 'Sell' call for Superhouse Ltd's stock.