Diana Tea Co's Q2 Financial Report Shows Mixed Performance, Investors Should Consider All Factors

Diana Tea Company, a microcap company in the tea/coffee industry, 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, Diana Tea Co has shown a flat performance in the second quarter of the fiscal year 2024-25. However, there has been an improvement in the company's score, which has increased from -8 to 2 in the last three months.

The company's Profit Before Tax (PBT) has seen a significant growth of 240.3% at Rs 1.88 crore compared to the average PBT of the previous four quarters, which was at Rs -1.34 crore. This shows a positive trend in the near term for PBT.

Similarly, the Profit After Tax (PAT) has also shown a remarkable growth of 651.6% at Rs 4.33 crore compared to the average PAT of the previous four quarters, which was at Rs -0.79 crore. This indicates a positive trend in the near term for PAT.

The Net Sales for the quarter have also increased by 22.6% at Rs 21.71 crore compared to the average Net Sales of the previous four quarters, which was at Rs 17.71 crore. This shows a positive trend in the near term for sales.

However, there are some areas that need improvement for Diana Tea Co. The Non-Operating Income for the quarter is 56.58% of the Profit Before Tax (PBT), which indicates that the company's income from non-business activities is high. This may not be a sustainable business model in the long run.

The company's Cash and Cash Equivalents have also decreased to Rs 0.35 crore in the last six half-yearly periods, indicating a deteriorating short-term liquidity. Additionally, the Debtors Turnover Ratio has slowed down to 14.27 times in the last five half-yearly periods, showing a decrease in the company's pace of settling its debtors.

Overall, Diana Tea Co has shown a mixed performance in the recent quarter, with some positive trends in terms of PBT, PAT, and Net Sales, but also some areas of concern such as non-operating income and liquidity. Investors should carefully consider these factors before making any investment decisions.