Monte Carlo Fashions Announces Mixed Q2 FY25 Results, Raises Concerns for Investors

Monte Carlo Fashions, a smallcap company in the lifestyle industry, recently announced its financial results for the quarter ending September 2024. The stock has been given a ‘Hold’ call by MarketsMOJO.

According to the financials, the company has seen a negative performance in the quarter, with a score of -13 compared to -12 in the previous quarter. However, there are some positive aspects to note. The company has shown a strong operating cash flow of Rs 81.46 crore annually, which is the highest in the last three years. This indicates that the company has generated higher cash revenues from its business operations.

On the other hand, there are some areas of concern for Monte Carlo Fashions. The Profit Before Tax (PBT) less Other Income has fallen by -85.27% year on year, and the Profit After Tax (PAT) has also decreased by -39.4% year on year. This trend is expected to continue in the near term. Additionally, the company’s interest cost has increased by 32.60% quarter on quarter, which could be a result of increased borrowings.

The company’s non-operating income is also a cause for concern, as it is 84.05% of the PBT. This means that a significant portion of the company’s income is coming from non-business activities, which may not be a sustainable business model. Moreover, the company’s debt-equity ratio is at its highest in the last five half-yearly periods, indicating that it is relying more on borrowings to fund its operations.

In conclusion, while Monte Carlo Fashions has shown some positive aspects in its financials, there are also some red flags that investors should be aware of. It is important to carefully analyze the company’s financial performance before making any investment decisions.