Are Universal Starch latest results good or bad?

Universal Starch Chem Allied has reported its financial results for the quarter ending March 2025, highlighting a notable rise in profitability metrics. The Profit Before Tax (PBT) reached Rs 3.35 crore, reflecting a significant growth compared to the average PBT of Rs 0.81 crore over the previous four quarters. Similarly, the Profit After Tax (PAT) increased to Rs 2.94 crore, which also shows substantial growth from the average PAT of Rs 1.19 crore in the prior four quarters.
However, the company is encountering challenges with rising interest costs, as interest expenses for the quarter amounted to Rs 2.65 crore, marking a notable increase quarter on quarter. This level of interest expense is the highest recorded in the last five quarters, indicating a trend of increased borrowings.

In terms of sales performance, the net sales for the quarter ended March 2025 grew by 7.45% compared to the previous quarter, which is a decline from the 41.38% growth seen in December 2024. The standalone net profit also reflected a decline, with a quarter-on-quarter change of -58.12%, contrasting with the 185.40% growth in the previous quarter. Additionally, the operating profit margin, excluding other income, saw a decrease of 2.59%.

Overall, while Universal Starch has demonstrated significant growth in profitability, it is also facing increased financial pressures from rising interest expenses and a decline in sales growth and net profit. The company has experienced an adjustment in its evaluation over the past three months.