Primo Chemicals Reports Strong Profit Growth Amid Concerns Over Inventory Turnover and Income Sources

Primo Chemicals, a microcap player in the commodity chemicals industry, has recently reported its financial results for the quarter ending June 2025. The evaluation changes reflect a notable shift in the company's score, which has adjusted from 23 to 16 over the past three months.
The financial results indicate several positive trends for Primo Chemicals. The Profit Before Tax (PBT) for the quarter stands at Rs 1.82 crore, showcasing significant growth compared to the average PBT of the previous four quarters, which was Rs -1.44 crore. Similarly, the Profit After Tax (PAT) has reached Rs 4.08 crore, marking a substantial increase over the average PAT of Rs 0.89 crore from the prior four quarters. Additionally, net sales for the latest six months have shown a year-on-year growth of 32.51%, indicating a favorable near-term sales trend.

Conversely, there are areas of concern. The inventory turnover ratio has reached its lowest point at 16.39 times, reflecting a decline over the last five half-year periods, suggesting a slowdown in the pace of selling inventory. Furthermore, non-operating income constitutes 74.33% of the PBT, raising questions about the sustainability of the company's income sources.

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