Financial Report Reveals Concerning Performance for Ambika Cotton Mills in Q3

Ambika Cotton Mills, a microcap textile company, recently announced its financial results for the quarter ended December 2023. The company's stock has been given a 'Sell' call by MarketsMOJO.

According to the financial report, Ambika Cotton has seen a very negative performance in the quarter, with a score of -22, which has improved from -29 in the last three months. This indicates that the company has been facing challenges in terms of its financials.

One of the major concerns for Ambika Cotton is its operating profit to interest ratio, which has been consistently falling in the last five quarters and is currently at its lowest at 4.46 times. This shows that the company's ability to manage its interest payments is deteriorating.

Another red flag in the financial report is the company's profit after tax (PAT) for the half-yearly period, which has decreased by 52.39% year on year. The near-term trend for PAT is also negative, indicating that the company's profitability is declining.

Furthermore, Ambika Cotton's interest expenses have been on the rise, with the latest quarter recording the highest interest cost of Rs 6.13 crore in the last five quarters. This is a 15.66% increase from the previous quarter, which suggests that the company has been taking on more borrowings.

Lastly, the earnings per share (EPS) for the quarter have been the lowest in the last five quarters at Rs 22.72. This indicates a decline in profitability and lower earnings for shareholders.

Overall, the financial results for Ambika Cotton Mills in the quarter ended December 2023 have been concerning, with various factors contributing to the negative performance. Investors are advised to carefully consider these factors before making any investment decisions.