Websol Energy Reports Strong Q3 FY24-25 Growth Amid Debt Servicing Challenges

Websol Energy System, a midcap player in the renewable energy sector, has recently undergone an evaluation adjustment reflecting its current market position and financial metrics. The company reported very positive financial performance for the third quarter of FY24-25, showcasing a growth in operating profit of 7.88%. This marks a continuation of positive results over the last three consecutive quarters, indicating a stable operational trend.
Key financial indicators reveal that Websol Energy's net sales for the half-year reached Rs 290.86 crore, while profit after tax stood at Rs 83.54 crore. The operating profit to interest ratio is notably high at 13.34 times, suggesting a robust capacity to manage interest obligations. However, the company faces challenges with a weak EBIT to interest ratio averaging -0.99, indicating difficulties in servicing its debt.

Despite a strong return on equity of 9.49%, the company's long-term fundamental strength appears weak, with a CAGR growth in operating profits of 40.50% over the past five years. Additionally, a significant portion of promoter shares, 93.04%, is pledged, which could exert downward pressure in adverse market conditions.

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