K G Denim Reports Significant Decline in Financial Performance for Q2 FY25

Nov 18 2024 12:51 PM IST

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K G Denim, a microcap company in the textile industry, has reported a significant decrease in net sales and profit before tax for the quarter ending September 2024. The company's operating profit to interest ratio is at its lowest in the last five quarters, indicating a deteriorating ability to manage interest payments. The debt-equity ratio and debtors turnover ratio have also been growing and falling respectively, showing a stressed liquidity situation. The earnings per share and cash and cash equivalents have also declined, highlighting a negative trend in profitability and short-term liquidity. Investors should consider these factors before making any investment decisions.

K G Denim, a microcap company in the textile industry, has recently declared its financial results for the quarter ending September 2024. According to the report released on November 14, 2024, the stock call for K G Denim by MarketsMOJO is ‘Strong Sell’.

The company has seen a very negative financial performance in the second quarter of the fiscal year 2024-2025. This trend has remained consistent in the last three months. The net sales for the quarter were at Rs 15.04 crore, which is a significant decrease of 73.8% compared to the average net sales of the previous four quarters, which was Rs 57.36 crore. This indicates a very negative sales trend in the near term.

The profit before tax (PBT) less other income for the quarter was at Rs -16.45 crore, which is a decrease of 25.0% compared to the average PBT of the previous four quarters, which was Rs -13.16 crore. This also shows a very negative trend in the near term for PBT.

The company’s operating profit to interest ratio for the quarter was at -78.94 times, which is the lowest in the last five quarters. This indicates a deteriorating ability to manage interest payments. The profit after tax (PAT) for the quarter was at Rs -12.10 crore, which is a decrease of 15.6% compared to the average PAT of the previous four quarters, which was Rs -10.47 crore. This shows a very negative trend in the near term for PAT.

The debt-equity ratio for the half-yearly period was at its highest at 25.67 times and has been growing in the last five half-yearly periods. This indicates that the company is borrowing more to fund its operations, which may lead to a stressed liquidity situation. The debtors turnover ratio for the half-yearly period was at its lowest at 3.15 times and has been falling in the last five half-yearly periods. This shows a slowing pace of settling debtors for the company.

The earnings per share (EPS) for the quarter was at its lowest at Rs -4.72 in the last five quarters, indicating a decline in profitability and lower earnings for shareholders. The cash and cash equivalents for the half-yearly period were at its lowest at Rs 1.34 crore, showing a deteriorating short-term liquidity situation for the company.

Overall, the financial results for the quarter ending September 2024 for K G Denim have been very negative, with declining sales, profitability, and liquidity. Investors should take note of these factors before making any investment decisions.

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