McNally Bharat's Q1 Financial Results Show Negative Outlook, Decline in Performance

McNally Bharat Engineering Company, a microcap engineering company, has recently declared its financial results for the quarter ended June 2024. The company has received a 'Strong Sell' call from MarketsMOJO, indicating a negative outlook for its stock.

According to the financials, McNally Bharat has seen a significant decline in its performance, with a score of -27 compared to -22 in the previous quarter. However, there are some positive aspects to the company's financials. The operating profit (PBDIT) for the quarter was the highest in the last five quarters at Rs -4.86 crore, and the near-term trend for operating profit is positive.

On the other hand, there are several areas where McNally Bharat's financials have not been performing well. The net sales for the quarter were at Rs 26.18 crore, showing a decline of -36.13% year on year. The profit after tax (PAT) for the half-yearly period also saw a decline of -49.34% year on year, indicating a negative trend in the near term. The company's interest costs have also increased by 28.98% quarter on quarter, which could be a sign of increased borrowings.

The debt-equity ratio for the half-yearly period is at its highest at -0.74 times, and it has been increasing each half-yearly period in the last five years. This suggests that the company is relying more on borrowings to fund its operations, which could lead to a stressed liquidity situation. The net sales for the quarter were also the lowest in the last five quarters, and the interest costs were the highest, showing a negative trend.

The profit before tax (PBT) for the quarter was the lowest in the last five quarters, and it has also seen a decline of -8.73% year on year. The company's cash and cash equivalents for the half-yearly period were also at their lowest in the last six half-yearly periods, indicating a deteriorating short-term liquidity situation. The debtors turnover ratio for the half-yearly period was also the lowest in the last five years, showing a slowdown in the company's pace of settling its debtors.

On a positive note, the non-operating income for the quarter was the highest in the last five quarters, but it may not be sustainable as it comes from non-business activities. Overall, McNally Bharat's financial performance for the quarter ended June 2024 has been very negative, and investors should carefully consider these factors before making any investment decisions.