Niyogin Fintech's Q1 FY25 results show positive sales trend, but declining profits raise concerns

Niyogin Fintech, a microcap finance company, has recently announced its financial results for the quarter ending June 2024. The company’s net sales for the half-yearly period have shown a growth of 27.97% year on year, indicating a positive sales trend in the near term. Additionally, the company’s cash and cash equivalents have also increased to Rs 129.87 crore, showing an improvement in short-term liquidity.

However, the company’s profit before tax (PBT) and profit after tax (PAT) for the quarter have both seen a significant decline of -45.0% and -54.6% respectively, compared to the average of the previous four quarters. This indicates a very negative trend in the near term for PBT and PAT.

Moreover, Niyogin Fintech’s debt-equity ratio has reached its highest at 0.19 times in the last five half-yearly periods. This suggests that the company is borrowing more to fund its operations, which may lead to a stressed liquidity situation.

MarketsMOJO has given a ‘Strong Sell’ call for Niyogin Fintech’s stock, based on its flat financial performance and negative trends in PBT and PAT. Investors should carefully consider these factors before making any investment decisions.