Modi Naturals Shows Positive Financial Performance in Q2 FY25, But Debt and Profitability Need Improvement

Debt to Equity Ratio – Annual: At 0.35 has increased from 0.29 in the previous year.Company’s reliance on debt has increased.

Net Profit Margin – Quarterly: At 5.17% has fallen from 6.44% in the previous quarter.Company’s profitability has decreased.

Modi Naturals, a microcap company in the solvent extraction industry, has recently announced its financial results for the quarter ending September 2024. The stock call by MarketsMOJO for the company is ‘Hold’.

According to the financials, Modi Naturals has shown a very positive performance in the quarter, with a score of 22, which is an improvement from the previous quarter’s score of 24. The company has also seen a steady growth in its operating cash flow, with the highest annual amount of Rs 15.71 crore in the last three years. This indicates that the company has generated higher cash revenues from its business operations.

In addition, Modi Naturals has also shown a strong ability to manage its interest payments, with the highest operating profit to interest ratio of 4.29 times in the last five quarters. The company’s net sales have also seen a significant growth of 23.8% in the quarter, reaching Rs 146.56 crore. This is a positive trend for the company’s sales in the near term.

The operating profit (PBDIT) for the quarter has also been the highest in the last five quarters, at Rs 13.34 crore. This shows a positive trend in the company’s operating profit in the near term. The operating profit margin has also improved, reaching its highest at 9.10% in the last five quarters, indicating an increase in the company’s efficiency.

Modi Naturals has also shown a positive trend in its profit before tax (PBT) and profit after tax (PAT), with the highest amounts of Rs 8.19 crore and Rs 7.58 crore respectively in the last five quarters. The company’s earnings per share (EPS) have also increased, reaching its highest at Rs 5.69 in the last five quarters, indicating a growth in profitability and higher earnings for shareholders.

However, there are some areas that need improvement for Modi Naturals. The interest cost for the half-yearly period has increased by 56.64%, which signifies a rise in the company’s borrowings. The debt to equity ratio has also increased from 0.29 to 0.35, indicating a higher reliance on debt for the company. The net profit margin has also decreased from 6.44% to 5.17% in the previous quarter, showing a decline in the company’s profitability.

Overall, Modi Naturals has shown a positive financial performance in the quarter ending September 2024, with some areas that need improvement. Investors are advised to hold their stock in the company, as suggested by MarketsMOJO.