ABM Knowledgeware's Q2 financials show steady growth, but reliance on non-operating income raises concerns

ABM Knowledgeware, a microcap IT software company, has recently declared its financial results for the quarter ending September 2024. The stock call by MarketsMOJO for ABM Knowledgeware is 'Hold'.

According to the financials, ABM Knowledgeware has shown a flat performance in the second quarter of the fiscal year 2024-2025. However, there has been an improvement in the company's score from 2 to 3 in the last three months.

The company's operating cash flow has been consistently growing over the last three years, with the highest amount of Rs 7.33 crore generated annually. This indicates that ABM Knowledgeware has been able to generate higher cash revenues from its business operations.

In terms of profit, the company has shown a positive trend with a 27.29% year-on-year growth in Profit After Tax (PAT) for the nine-month period ending September 2024. The PAT for this period is also higher at Rs 12.50 crore compared to the preceding 12-month period.

However, there are some areas that need improvement for ABM Knowledgeware. The non-operating income for the quarter is 38.99% of the Profit Before Tax (PBT), indicating a high reliance on non-business activities. This may not be a sustainable business model in the long run. Additionally, the non-operating income for the quarter is the highest in the last five quarters, which may not be sustainable.

Overall, ABM Knowledgeware has shown a mixed performance in the second quarter of the fiscal year 2024-2025. Investors are advised to hold their position in the stock, as recommended by MarketsMOJO.