Rajapalayam Mills Reports Negative Financial Performance in Q1 FY25

Rajapalayam Mills, a microcap textile company, has recently declared its financial results for the quarter ending June 2024. According to the latest report, the company has seen a negative financial performance with a score of -13, which has improved from -18 in the last three months.

The profit before tax (PBT) less other income for the quarter has fallen by 39.56% year on year (YoY) to Rs -24.66 crore, indicating a very negative trend in the near term. Similarly, the profit after tax (PAT) for the quarter has also fallen by a staggering 4016.7% YoY to Rs -7.05 crore, further highlighting the negative trend in the company’s financials.

The company’s operating profit to interest ratio for the quarter is at its lowest in the last five quarters, standing at 0.73 times. This indicates a deteriorating ability to manage interest payments. Additionally, the interest cost for the preceding nine months has grown by 35.51%, indicating increased borrowings.

The PBT less other income for the quarter is also at its lowest in the last five quarters, further emphasizing the negative trend in the company’s financials. The earnings per share (EPS) for the quarter is also at its lowest in the last five quarters, indicating declining profitability and lower earnings for shareholders.

The company’s cash and cash equivalents for the last six half-yearly periods are at its lowest, indicating a deteriorating short-term liquidity. Moreover, the non-operating income for the quarter is at its highest in the last five quarters, which may not be sustainable as it comes from non-business activities.

Based on these financial results, MarketsMOJO has given a ‘Sell’ call for Rajapalayam Mills’ stock. Investors should carefully consider these financials before making any investment decisions.