Kirloskar Ferrous Industries Reports Flat Q2 Performance, Potential Growth in Net Sales and Dividends

Kirloskar Ferrous Industries, a midcap company in the steel, sponge iron, and pig iron industry, recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Sell' call by MarketsMOJO.

According to the financial report, Kirl. Ferrous has shown a flat performance in the second quarter of the fiscal year 2024-2025. However, there has been a slight improvement in the company's score, which has gone from -6 to -5 in the last three months.

One of the positive aspects of the company's financials is its net sales, which have been the highest in the last five quarters at Rs 1,666.02 crore. The near-term sales trend is also positive, indicating potential growth in the future. Additionally, the company has been distributing higher dividends from its profits, with the dividend per share (DPS) being the highest at Rs 5.50 in the last five years.

On the other hand, there are some areas that are not working in favor of Kirl. Ferrous based on the September 2024 financials. The profit before tax (PBT) has fallen by 18.0% compared to the average PBT of the previous four quarters. The profit after tax (PAT) has also shown a negative trend, with a growth of -32.44% year on year. The company's dividend payout ratio (DPR) has also decreased each year in the last five years, indicating a lower distribution of profits as dividends.

Moreover, the interest cost has increased by 10.75% quarter on quarter, indicating a rise in borrowings. The non-operating income has also shown an increase, but it may not be sustainable as it comes from non-business activities.

Overall, the financial performance of Kirloskar Ferrous Industries in the second quarter of FY24-25 has been flat, with some positive and negative aspects. Investors should carefully consider these factors before making any investment decisions.