Raj Rayon Industries Reports Significant Profit Growth Amid Business Model Concerns in May'25

Raj Rayon Industries, a small-cap player in the Garments & Apparels sector, has recently reported its financial results for the quarter ending March 2025. The results, declared on May 29, 2025, indicate a notable shift in the company's evaluation, with a revision in its score from 18 to 16 over the past three months.
The financial performance showcases significant growth in key metrics. Profit Before Tax (PBT) reached Rs 4.85 crore, reflecting a substantial increase compared to the average PBT of the previous four quarters, which stood at Rs -0.46 crore. Similarly, Profit After Tax (PAT) surged to Rs 13.44 crore, marking a remarkable rise from the previous average of Rs -0.45 crore. This quarter also saw the highest Operating Profit to Interest ratio at 4.00 times in the last five quarters, indicating an improvement in the company's ability to manage interest payments. Additionally, Earnings per Share (EPS) reached Rs 0.24, the highest in the last five quarters, suggesting enhanced profitability for shareholders.

However, the company faces challenges, particularly with non-operating income constituting 34.99% of its PBT, raising concerns about the sustainability of its business model.

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