GRP Reports Q3 FY24-25 Results, Highlights Profit Decline and Rising Debt Concerns

GRP, a small-cap company in the rubber products industry, has recently reported its financial results for the third quarter of FY24-25, which have prompted an adjustment in its evaluation. Over the nine-month period ending December 2024, GRP achieved net sales of Rs 390.11 crore, reflecting a year-on-year growth of 20.61%. However, the profit after tax (PAT) for the quarter was Rs 4.38 crore, which represents a decline compared to the average PAT of Rs 6.17 crore over the previous four quarters, indicating a concerning trend in profitability.
The company has also experienced a rise in interest expenses, which reached Rs 2.94 crore, marking a significant increase quarter-on-quarter. This development raises questions regarding GRP's borrowing levels. Additionally, the operating profit to interest ratio has fallen to its lowest point in five quarters at 4.30 times, suggesting challenges in managing interest obligations. Furthermore, GRP's cash and cash equivalents have dwindled to Rs 0.27 crore, while its debt-equity ratio has risen to 0.69 times, the highest in recent periods, pointing to potential liquidity concerns.

In light of these results, GRP's score has undergone a revision, reflecting the shifts in its financial landscape.

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