Dhruv Consultancy Services Shows Positive Q2 Results, But Operating Cash Flow Decline Raises Concerns

This is a cause of concern.
Dhruv Consultancy Services, a microcap company in the oil exploration and refineries industry, has recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Hold' call by MarketsMOJO.

According to the financial report, Dhruv Consultancy Services has shown a positive performance in the second quarter of the fiscal year 2024-2025. The company's score has improved from 6 to 7 in the last three months.

One of the key factors contributing to this positive performance is the growth in net sales. The company's net sales for the quarter were Rs 32.67 crore, which is a 45.4% increase compared to the average net sales of the previous four quarters. This indicates a very positive sales trend in the near term. Additionally, this is the highest net sales the company has seen in the last five quarters.

The company's profit before tax less other income (PBT) has also shown a growth of 33.6% compared to the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) has increased by 28.4% compared to the average PAT of the previous four quarters. This indicates a positive trend in both PBT and PAT in the near term.

However, one area of concern for Dhruv Consultancy Services is its operating cash flow. The company's operating cash flow for the year was the lowest at Rs -1.71 crore and has been falling each year for the past three years. This indicates that the company's cash revenues from business operations are declining, which is a cause for concern.

Overall, Dhruv Consultancy Services has shown a positive financial performance in the quarter ending September 2024. However, the declining operating cash flow is something that the company needs to address in order to sustain its growth in the long term.