E-Land Apparel Reports Strong Financial Performance in Q1 FY25, But Concerns Remain

E-Land Apparel, a microcap textile company, has recently announced its financial results for the quarter ending June 2024. The company has shown positive growth in various key financial indicators, leading to an overall improvement in its financial performance.

According to the latest financial report, E-Land Apparel’s Profit Before Tax (PBT) has increased by 110.7% to Rs 1.25 crore, compared to the average PBT of the previous four quarters which was at a loss of Rs 11.74 crore. This shows a significant improvement in the company’s near term PBT trend.

Similarly, the company’s Profit After Tax (PAT) has also shown a positive growth of 138.8% to Rs 3.86 crore, compared to the average PAT of the previous four quarters which was at a loss of Rs 9.96 crore. This indicates a strong near term PAT trend for E-Land Apparel.

The company’s Net Sales have also seen a significant increase of 58.2% to Rs 85.19 crore, compared to the average Net Sales of the previous four quarters which was at Rs 53.85 crore. This shows a positive near term sales trend for the company.

E-Land Apparel’s ability to manage its interest payments has also improved, with its Operating Profit to Interest ratio being the highest in the last five quarters at 1.41 times. This indicates a positive trend in the company’s financial management.

Moreover, the company’s Operating Profit (PBDIT) has also shown a positive trend, being the highest at Rs 8.96 crore in the last five quarters. This indicates an improvement in the company’s near term Operating Profit trend.

E-Land Apparel’s efficiency has also improved, with its Operating Profit Margin being the highest at 10.52% in the last five quarters. This shows that the company has been able to generate higher profits from its operations.

In terms of shareholder earnings, the company’s Earnings per Share (EPS) have also shown a positive trend, being the highest at Rs 0.80 in the last five quarters. This indicates that the company has been able to create higher earnings for its shareholders.

On the other hand, the company’s Non Operating Income is 67.62% of its PBT, which is a cause for concern as it shows a high reliance on non-business activities for income. Additionally, the company’s Debtors Turnover Ratio has slowed down, indicating a slower pace of settling its debtors.

Overall, E-Land Apparel has shown positive financial performance in the quarter ending June 2024, with improvements in key indicators such as PBT, PAT, Net Sales, and Operating Profit. However, the company needs to address its high reliance on non-business income and work on improving its debtors turnover ratio for sustained growth in the future. Based on these financial results, MarketsMOJO has given a ‘Sell’ call for E-Land Apparel’s stock.