Modison's Q3 financials show positive growth, but caution advised for investors

Modison, a microcap company in the capital goods industry, has recently announced its financial results for the quarter ending September 2024. The company has shown a positive performance in this quarter, with its score improving from 1 to 17 in the last three months.

According to the financials, Modison's net sales for the quarter were at a record high of Rs 122.48 crore, with a consistent growth trend in the last five quarters. The company's profit after tax (PAT) for the quarter was Rs 6.33 crore, showing a growth of 46.4% compared to the average PAT of the previous four quarters. This indicates a positive trend in the company's profitability in the near term.

Modison has also shown a strong dividend payout ratio of 37.98%, which has been increasing each year for the past five years. This shows that the company is distributing a higher proportion of its profits as dividends to its shareholders.

The company's operating profit (PBDIT) for the quarter was at its highest in the last five quarters, at Rs 10.15 crore. The profit before tax (PBT) less other income was also at its highest in the last five quarters, at Rs 6.77 crore. This indicates a positive trend in the company's operating and pre-tax profits.

Modison's earnings per share (EPS) for the quarter were at its highest in the last five quarters, at Rs 2.52. This shows that the company has been able to generate higher earnings for its shareholders.

However, there are some areas that need improvement for Modison. The company's operating cash flow for the last three years has been consistently low, with the latest figure at Rs -3.89 crore. This indicates a decline in the company's cash revenues from business operations.

Additionally, the company's non-operating income for the quarter was at its highest in the last five quarters, at Rs 1.71 crore. While this may seem positive, it is important to note that this income is from non-business activities and may not be sustainable in the long run.

Overall, Modison has shown a positive financial performance in the quarter ending September 2024. However, investors should carefully consider all aspects of the company's financials before making any investment decisions. MarketsMOJO has given a 'Hold' call for Modison's stock, indicating a neutral stance on the company's future prospects.