LKP Finance Reports Positive Q2 Results with Strong Cash Flow and Low Debt

LKP Finance, a microcap finance company, recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Hold' call by MarketsMOJO.

According to the financials, LKP Finance has shown positive performance in the second quarter of FY24-25. The company's score has improved from 22 to 7 in the last three months.

One of the key factors contributing to this positive performance is the company's operating cash flow, which has been consistently growing over the last three years and is currently at its highest at Rs 51.87 crore. Additionally, LKP Finance has been reducing its debt and maintaining a low debt-equity ratio of 0.14 times.

The company's profit after tax (PAT) for the first nine months of the financial year stands at Rs 40.92 crore, showing a growth of 31.62% year on year. This indicates a positive trend in the near term.

LKP Finance has also been distributing higher dividends to its shareholders, with the dividend per share (DPS) at its highest in the last five years at Rs 3.00.

However, there are some areas where the company needs to improve. The net sales for the quarter have fallen by -13.7% compared to the average of the previous four quarters. The net sales for the quarter are also the lowest in the last five quarters, indicating a negative trend in the near term.

Similarly, the profit before tax (PBT) has also fallen by -6.4% compared to the average of the previous four quarters. This shows a negative trend in the near term.

Overall, LKP Finance has shown positive financial performance in the second quarter of FY24-25, with strong operating cash flow and low debt. However, the company needs to address the decline in net sales and PBT to maintain its positive trend in the near future.