Bharat Parenterals Reports Mixed Financial Performance in Q2 2024, Investors Should Exercise Caution

Bharat Parenterals, a microcap pharmaceutical company, recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Sell' call by MarketsMOJO.

According to the financial report, Bharat Parenterals has seen a negative performance in the second quarter of the fiscal year 2024-2025, with a score of -18, which has improved from -23 in the last three months.

On a positive note, the company's net sales for the half-yearly period have grown by 26.53% year on year, reaching Rs 164.14 crore. This indicates a positive sales trend in the near term. Additionally, the company has a high dividend payout ratio of 4.01%, which shows that it is distributing a higher proportion of its profits as dividends.

However, there are some areas of concern for Bharat Parenterals. The company's interest costs have increased by 232.16% in the last half-yearly period, indicating a rise in borrowings. Moreover, the company's profit before tax less other income has fallen by -1109.28% year on year, and its profit after tax has also declined by -313.4% year on year. This shows a very negative trend in the near term.

Furthermore, the company's ability to manage interest payments has deteriorated, with an operating profit to interest ratio of -2.63 times in the last five quarters. The operating cash flow has also decreased, reaching a low of Rs -4.71 crore in the last three years.

In terms of profitability, Bharat Parenterals has a negative operating profit margin of -10.69% in the last five quarters, indicating a decline in efficiency. The company's earnings per share have also decreased to a low of Rs -11.52 in the last five quarters, creating lower earnings for shareholders.

On a positive note, the company's non-operating income has increased to a high of Rs 4.21 crore in the last five quarters. However, this may not be sustainable as it comes from non-business activities.

Overall, Bharat Parenterals has shown a mixed financial performance in the quarter ending September 2024. Investors should carefully consider these factors before making any investment decisions.