Pakka's Q1 Financial Results Show Negative Performance, 'Sell' Call Issued by MarketsMOJO

Pakka, a microcap company in the paper and paper products industry, recently announced its financial results for the quarter ending March 2024. According to the report released on May 30, 2024, the company has seen a negative performance with a score of -14, a significant decrease from -9 in the previous quarter.

The company's profit after tax (PAT) for the quarter has fallen by 31.5% to Rs 8.07 crore, compared to the average PAT of the previous four quarters at Rs 11.78 crore. This trend is expected to continue in the near term. Similarly, the net sales for the quarter have also decreased by 10.2% to Rs 94.58 crore, compared to the average net sales of the previous four quarters at Rs 105.32 crore.

One of the major factors contributing to this negative performance is the increase in interest costs, which has grown by 30.27% quarter on quarter. This signifies an increase in borrowings by the company. Additionally, the operating profit (PBDIT) for the quarter is at its lowest in the last five quarters, indicating a negative trend in the near term. The same can be said for the profit before tax less other income (PBT), which is also at its lowest in the last five quarters.

The company's earnings per share (EPS) for the quarter is at its lowest in the last five quarters, showing a decline in profitability and lower earnings for shareholders. On the other hand, the non-operating income for the quarter is at its highest in the last five quarters, but this increase may not be sustainable as it comes from non-business activities.

Based on these financial results, MarketsMOJO has given a 'Sell' call for Pakka's stock. The company will need to address these issues and improve its financial performance in the upcoming quarters to regain investor confidence.