AVT Natural Products' Q2 FY25 financials show mixed results, with some areas of concern

AVT Natural Products, a smallcap company in the refined oil and vanaspati industry, recently declared its financial results for the quarter ending September 2024. According to MarketsMOJO, the stock call for AVT Natural Products is ‘Sell’.

The company’s financial performance for the quarter has been negative, with a score of -14 compared to -12 in the previous quarter. However, there are some positive aspects to AVT Natural Products’ financials. The company has shown a strong operating cash flow of Rs 104.96 crore annually in the last three years, indicating higher cash revenues from business operations. Additionally, the dividend payout ratio (DPR) has been the highest at 26.27% in the last five years, showing that the company is distributing a higher proportion of profits as dividends.

On the other hand, there are some areas of concern for AVT Natural Products based on its September 2024 financials. The profit before tax less other income (PBT) for the quarter has fallen by 75.54% year on year (YoY) to Rs 2.61 crore. This indicates a very negative trend in the near term. The interest cost has also increased by 43.38% quarter on quarter (QoQ) to Rs 1.95 crore, which suggests that the company has taken on more borrowings. The operating profit to interest ratio is at its lowest in the last five quarters, indicating a deteriorating ability to manage interest payments.

Furthermore, the profit after tax (PAT) for the half-yearly period has decreased by 38.40% YoY to Rs 12.27 crore, and the net sales for the quarter have also shown a negative trend, decreasing by 9.90% YoY to Rs 121.83 crore. The PBT for the quarter is at its lowest in the last five quarters, indicating a negative trend in the near term. Additionally, the non-operating income is 65.75% of the PBT, which suggests that the company’s income from non-business activities is high, which may not be a sustainable business model.

In conclusion, AVT Natural Products has shown a mixed financial performance for the quarter ending September 2024. While there are some positive aspects, there are also areas of concern that investors should consider before making any investment decisions.