KG Petrochem Reports Strong December 2024 Results Amid Concerns Over Profit Sustainability

KG Petrochem, a microcap player in the textile industry, has recently reported its financial results for the quarter ending December 2024. The results, declared on February 12, 2025, indicate a notable shift in the company's evaluation, with its score rising significantly over the past three months.
The financial data reveals that KG Petrochem achieved net sales of Rs 104.76 crore, reflecting a year-on-year growth of 49.21%. This positive sales trend suggests a robust demand for the company's products. Additionally, the operating profit to interest ratio reached its highest level in five quarters at 6.12 times, indicating an enhanced capacity to manage interest obligations. The operating profit (PBDIT) also peaked at Rs 6.79 crore, while profit before tax (PBT) and profit after tax (PAT) recorded their highest figures in the same period, at Rs 2.24 crore and Rs 2.78 crore, respectively. Furthermore, earnings per share (EPS) reached Rs 4.78, showcasing improved profitability for shareholders.

However, it is important to note that a significant portion of the profit before tax, approximately 44.96%, is derived from non-operating income, which raises concerns about the sustainability of the business model.

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