Kalyani Steels Reports Negative Performance in Q1 FY25, Concerns Over Profitability and Liquidity

Kalyani Steels, a smallcap company in the iron and steel industry, recently announced its financial results for the quarter ending June 2024. According to the data released on August 6, 2024, the company has seen a negative performance in this quarter, with a score of -7 compared to 3 in the previous quarter.

Despite this, there are some positive aspects to the company’s financials. Kalyani Steels has shown a strong operating cash flow of Rs 301.56 crore annually in the last three years, indicating higher cash revenues from its business operations. Additionally, the company has also distributed a higher dividend of Rs 10 per share annually in the last five years, showcasing its ability to generate profits and share them with its shareholders.

However, there are some concerning factors as well. The company’s profit before tax less other income (PBT) for this quarter has fallen by 17.2% compared to the average PBT of the previous four quarters. Similarly, the profit after tax (PAT) has also decreased by 16.6% compared to the average PAT of the previous four quarters. The net sales for this quarter are also at its lowest in the last five quarters, with a negative trend in the near term. The operating profit and profit margin have also declined, indicating a decrease in the company’s efficiency.

Moreover, the earnings per share (EPS) for this quarter are at its lowest in the last five quarters, showing a decline in profitability and lower earnings for shareholders. The company’s short-term liquidity has also deteriorated, with its cash and cash equivalents at its lowest in the last six half-yearly periods.

Based on these financial results, MarketsMOJO has given a ‘Sell’ call for Kalyani Steels’ stock. Investors should carefully consider these factors before making any investment decisions.