Are Master Trust latest results good or bad?

Master Trust's latest financial results present a mixed picture, highlighting both strengths and concerns. For the fiscal year 2025, the company reported an annual net profit of ₹131.00 crores, reflecting a year-on-year growth of 21.30% from ₹108.00 crores in FY24. Additionally, revenue reached ₹583.00 crores, which is a 16.60% increase compared to the previous year's ₹500.00 crores. The profit after tax (PAT) margin improved to 22.5%, up by 90 basis points from the prior year, indicating enhanced profitability.
However, the quarterly performance shows signs of deceleration. In the second quarter of FY26, net sales declined by 8.60% compared to the previous four-quarter average, raising concerns among market participants regarding the sustainability of growth. Operating cash flow turned negative at ₹-37.08 crores for FY25, a significant drop from a robust inflow of ₹457.00 crores in FY24, which raises questions about the company's operational health.

Despite these challenges, Master Trust maintains a relatively stable balance sheet with zero long-term debt and an increase in shareholder funds to ₹638.25 crores in FY25. The return on equity for the latest fiscal year stood at 22.14%, which is above the average for the assessment period, indicating efficient capital deployment.

Overall, while Master Trust has demonstrated solid profitability metrics and a strong long-term growth track record, the recent operational trends and cash flow issues suggest a need for close monitoring. The company saw an adjustment in its evaluation, reflecting the complexities of its current financial landscape. Investors may want to consider these factors carefully as they assess the company's future trajectory.