Positive trends in Ambika Cotton Mills' financials for Q1 2024, but areas for improvement

Ambika Cotton Mills, a smallcap textile company, has recently declared its financial results for the quarter ended June 2024. According to the data released on August 9, 2024, the company has shown a flat performance in the quarter. However, there are some positive trends that can be observed from the financials.

The company's operating profit (PBDIT) for the quarter was at its highest at Rs 33.86 crore and has been growing each quarter in the last five quarters. This indicates a positive trend in the near term for the company's operating profit. The operating profit margin has also shown improvement, reaching its highest at 16.19% and growing each quarter in the last five quarters. This shows that the company's efficiency has improved.

The profit before tax (PBT) less other income for the quarter was at Rs 23.31 crore, which is a growth of 49.2% over the average PBT of the previous four quarters. This also indicates a positive trend in the near term for the company's PBT. The profit after tax (PAT) for the quarter was at its highest at Rs 21.53 crore and has grown at 36.7% over the average PAT of the previous four quarters. This shows a positive trend in the near term for the company's PAT.

The company's earnings per share (EPS) for the quarter was at its highest at Rs 37.57, indicating an increase in profitability and higher earnings for shareholders. The debtors turnover ratio for the half-yearly period was at its highest at 32.33 times, showing that the company has been able to settle its debtors faster.

However, there are some areas that need improvement. The interest cost for the nine-month period has grown at 48.71%, indicating increased borrowings. The inventory turnover ratio for the half-yearly period has fallen each half-year in the last five periods, showing a slower pace of selling inventory. The debt-equity ratio for the half-yearly period was at its highest at 0.10 times, indicating that the company is borrowing more to fund its operations and its liquidity situation may be stressed.

Overall, Ambika Cotton Mills has shown a mixed performance in the quarter ended June 2024. While there are some positive trends, there are also areas that need improvement. MarketsMOJO has given a 'Hold' call for the company's stock based on its financial performance. Investors are advised to carefully analyze the company's financials before making any investment decisions.