Everest Kanto Cylinder's Q2 financials show mixed performance, with potential for profitability

Nov 16 2024 05:03 PM IST

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Everest Kanto Cylinder, a smallcap company in the packaging industry, has reported a flat performance in the second quarter of fiscal year 2024-25. However, the company's Profit After Tax has grown by 43.5% and it has generated a high operating cash flow in the last three years. The net sales and operating profit for the quarter were also at their highest in the last five quarters. On the downside, the interest cost has increased and the company's ability to manage interest payments has deteriorated. The company's debtors turnover ratio has also slowed down. Overall, the company's financial results show a mixed performance with some positive aspects and areas that need improvement. MarketsMojo has given a 'Hold' call for the company's stock, indicating a neutral stance.

Everest Kanto Cylinder, a smallcap company in the packaging industry, has recently declared its financial results for the quarter ending September 2024. According to the latest report, the company has seen a flat performance in the second quarter of the fiscal year 2024-25. The score has fallen to -2 from 9 in the last 3 months.

Despite this, there are some positive aspects to the company's financials. The Profit After Tax (PAT) for the quarter has grown by 43.5% to Rs 38.47 crore, compared to the average PAT of the previous four quarters which was Rs 26.81 crore. This indicates a positive trend in the near term for the company's profitability. Additionally, the company has generated a high operating cash flow of Rs 226.40 crore in the last three years, indicating strong revenue from business operations.

The net sales for the quarter were also at its highest in the last five quarters, at Rs 367.28 crore, showing a positive trend in the near term. The Operating Profit (PBDIT) for the quarter was also at its highest in the last five quarters, at Rs 53.12 crore. This indicates a positive trend in the near term for the company's operating profit.

On the other hand, there are some areas that need improvement for Everest Kanto. The interest cost for the quarter has increased by 276.26% quarter on quarter, indicating increased borrowings. The company's ability to manage interest payments has also deteriorated, with the Operating Profit to Interest ratio being at its lowest in the last five quarters.

The company's pace of settling its debtors has also slowed, with the Debtors Turnover Ratio being at its lowest in the last five half yearly periods. Additionally, the company's non-operating income has increased, but it may not be sustainable in the long term.

Overall, Everest Kanto Cylinder's financial results for the quarter ending September 2024 show a mixed performance. While there are some positive aspects, there are also areas that need improvement. MarketsMOJO has given a 'Hold' call for the company's stock, indicating a neutral stance. Investors should carefully consider these factors before making any decisions regarding the company's stock.

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