NLC India's Q4 financial results show negative trend, investors advised to hold

NLC India, a largecap company in the power industry, recently declared its financial results for the quarter ending March 2024. According to MarketsMOJO, the stock call for NLC India is 'Hold'.

However, the company's financial performance for the quarter has been negative, with a score of -13 compared to 7 in the previous quarter. This is a cause for concern for investors.

One of the major factors contributing to this decline is the Profit Before Tax (PBT) less Other Income, which has fallen by -146.8% to Rs -328.51 crore compared to the average PBT of the previous four quarters at Rs 701.60 crore. This indicates a very negative trend in the near term.

Similarly, the Profit After Tax (PAT) has also fallen by -82.3% to Rs 114.23 crore compared to the average PAT of the previous four quarters at Rs 643.84 crore. The company's ability to manage interest payments has also deteriorated, with the Operating Profit to Interest ratio at its lowest in the last five quarters.

In terms of sales, NLC India has seen a decline of -23.92% Year on Year (YoY) with net sales at Rs 6,705.01 crore for the half-yearly period. The Operating Profit (PBDIT) has also been at its lowest in the last five quarters at Rs 602.13 crore, indicating a negative trend in the near term.

The company's efficiency has also taken a hit, with the Operating Profit Margin at its lowest in the last five quarters at 17.01%. This is a cause for concern for investors.

Moreover, the company's income from non-business activities is high, with the Non Operating Income at 298.59% of the Profit Before Tax (PBT). This is not a sustainable business model and could impact the company's profitability in the long run.

Lastly, the Earnings per Share (EPS) has also declined to its lowest in the last five quarters at Rs 0.82. This indicates a declining profitability and lower earnings for shareholders.

Overall, NLC India's financial performance for the quarter ending March 2024 has been negative, with various factors contributing to this decline. Investors are advised to hold their stocks and closely monitor the company's performance in the coming quarters.