Dwarikesh Sugar Industries' Q2 FY25 financials show decline in sales, profits, and efficiency.

Dwarikesh Sugar Industries, a smallcap company in the sugar industry, recently declared its financial results for the quarter ending September 2024. The stock has been given a ‘Strong Sell’ call by MarketsMOJO.

The company has seen a very negative financial performance in the second quarter of FY24-25, with a score of -30, which has improved from -35 in the last 3 months. However, there are some positive aspects in the financials for the company.

Dwarikesh Sugar has been able to maintain a low Debt-Equity Ratio of 0.30 times in the last five half yearly periods, indicating a reduction in borrowing compared to equity capital. The Debtors Turnover Ratio has also been the highest at 3,122.34 times in the last five half yearly periods, showing that the company has been able to settle its debtors faster.

On the other hand, there are some areas of concern for Dwarikesh Sugar based on the September 2024 financials. The Net Sales for the quarter have fallen by -33.5% at Rs 246.06 crore, compared to the average Net Sales of the previous four quarters at Rs 369.90 crore. The Profit Before Tax less Other Income (PBT) has also fallen by -362.1% at Rs -37.98 crore, compared to the average PBT of the previous four quarters at Rs 14.49 crore. The Profit After Tax (PAT) has also seen a decline of -388.9% at Rs -24.00 crore, compared to the average PAT of the previous four quarters at Rs 8.31 crore.

The company’s operating cash flow has also been on a decline, with the lowest at Rs 13.37 crore in the last three years. The Operating Profit to Interest has also been at its lowest at -8.69 times in the last five quarters, indicating a deteriorating ability to manage interest payments. The Operating Profit Margin has also been at its lowest at -9.36% in the last five quarters, showing a decline in the company’s efficiency.

In conclusion, Dwarikesh Sugar Industries has shown a very negative financial performance in the recent quarter, with declining sales, profits, and cash flow. The company’s ability to manage interest payments and efficiency has also deteriorated. Investors are advised to exercise caution and consider the company’s financial performance before making any investment decisions.