Are Setco Automotive latest results good or bad?

Setco Automotive has reported its financial results for the quarter ending June 2025, which reflect a challenging operational environment. The company experienced a year-on-year growth in net sales of 9.95%, compared to 11.99% in the same quarter of the previous year. However, the consolidated net profit showed a decline of 19.43%, contrasting with a positive growth of 5.74% in June 2024.
The operating profit, excluding other income, was reported at Rs 21.58 crore, with a year-on-year growth of 11.93%. Despite this, the operating profit margin remained relatively stable at 12.07%. The interest expenses have risen significantly, indicating increased financial pressure, and the operating profit to interest ratio has fallen to its lowest level in five quarters at 0.37 times, suggesting challenges in managing interest obligations.

Additionally, the company's profit before tax (PBT) has decreased to Rs -44.00 crore, reflecting a year-on-year decline of 15.15%, while the profit after tax (PAT) stands at Rs -33.80 crore, down 16.8% year-on-year. The debt-equity ratio has also risen to -1.61 times, indicating a higher reliance on borrowing, which may signal potential liquidity challenges. Furthermore, the earnings per share (EPS) have dropped to Rs -2.61, and the debtors turnover ratio has decreased to 10.29 times, the lowest in five half-year periods, highlighting a slowdown in debt collection.

Overall, Setco Automotive's latest financial results indicate significant operational difficulties, leading to an adjustment in its evaluation.