JNK India's Financial Results Show Decline, MarketsMOJO Issues 'Sell' Call

JNK India, a smallcap company in the engineering industry, recently declared its financial results for the quarter ending June 2024. According to the report released on August 13, 2024, MarketsMOJO has given a 'Sell' call for the company's stock.

The financials for the quarter show a decline in net sales by 27.6% at Rs 87.91 crore compared to the average net sales of the previous four quarters, which stood at Rs 121.41 crore. This indicates a negative trend in near term sales for the company.

The profit before tax less other income (PBT) for the quarter has also fallen by 75.9% at Rs 4.68 crore, compared to the average PBT of the previous four quarters, which was Rs 19.40 crore. This shows a significant decline in near term PBT for the company.

Similarly, the profit after tax (PAT) for the quarter has also fallen by 56.9% at Rs 6.52 crore, compared to the average PAT of the previous four quarters, which was Rs 15.14 crore. This indicates a negative trend in near term PAT for the company.

The interest cost for the quarter has increased by 38.37% quarter on quarter (QoQ) at Rs 3.57 crore. This rise in interest cost signifies increased borrowings for the company.

Moreover, the company's ability to manage interest payments has deteriorated, with the operating profit to interest ratio being the lowest at 2.66 times in the last five quarters.

The operating profit margin for the quarter has also declined to its lowest at 10.82% in the last five quarters, indicating a deterioration in the company's efficiency.

Additionally, the non-operating income for the quarter is 37.18% of the PBT, which is a high percentage. This suggests that the company's income from non-business activities is not a sustainable business model.

Based on these financial results, MarketsMOJO has given a 'Sell' call for JNK India's stock. Investors should carefully consider these factors before making any investment decisions.