Nilkamal Ltd Reports Record Quarterly Sales Amid Declining Profitability and Rising Debt Concerns

Nilkamal Ltd, a small-cap player in the plastic products industry, has recently reported its financial results for the quarter ending December 2024. The company experienced notable shifts in its financial metrics, leading to an adjustment in its evaluation.
On a positive note, Nilkamal achieved its highest quarterly net sales in the last five quarters, reaching Rs 854.28 crore. This indicates a favorable near-term sales trend. However, the company faced significant challenges as reflected in its profit metrics. Profit Before Tax (PBT) registered at Rs 24.89 crore, marking a year-on-year decline of 30.40%. Similarly, Profit After Tax (PAT) fell to Rs 21.49 crore, down 26.7% year-on-year, indicating a concerning trend in profitability.

Additionally, the company's operating profit margin reached its lowest point in five quarters at 7.42%, suggesting a decline in operational efficiency. The debt-equity ratio also peaked at 0.32 times, indicating increased borrowing to support operations, which may strain liquidity. Furthermore, the debtors turnover ratio hit a low of 6.54 times, reflecting a slowdown in the pace of settling debts.

Overall, Nilkamal Ltd's recent financial results highlight a complex landscape of growth in sales juxtaposed with declining profitability and rising financial pressures.

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