Ram Ratna Wires Reports Positive Q4 Results, But High Debt to Equity Ratio Raises Concerns

Debt to Equity Ratio - Quarterly: Highest at 0.72 in the last five quarters and Increased by 1.41 % (QoQ).High debt to equity ratio indicates higher financial risk for the company.

Ram Ratna Wires, a smallcap company in the non-ferrous metal industry, has recently declared its financial results for the quarter ending March 2024. According to the latest report, the company has shown positive performance in terms of profit before tax and after tax, net sales, operating profit, and operating profit margin.

The company's profit before tax less other income (PBT) for the quarter has grown by 42.6% to Rs 20.56 crore, compared to the average PBT of the previous four quarters which was Rs 14.42 crore. This indicates a very positive trend in the near term. Similarly, the profit after tax (PAT) for the quarter has also shown a growth of 41.6% to Rs 17.60 crore, compared to the average PAT of the previous four quarters which was Rs 12.43 crore.

The net sales for the quarter have been the highest in the last five quarters at Rs 803.39 crore, showing a positive trend in the near term. The operating profit (PBDIT) for the quarter has also been the highest in the last five quarters at Rs 36.77 crore, indicating a positive trend in the near term. The operating profit margin for the quarter has also been the highest in the last five quarters at 4.58%, showing an improvement in the company's efficiency.

The company's earnings per share (EPS) for the quarter have been the highest in the last five quarters at Rs 4.00, indicating an increase in profitability and creating higher earnings for shareholders.

However, there are some areas that need improvement for Ram Ratna Wires. The interest cost for the quarter has been the highest in the last five quarters at Rs 11.09 crore, showing an increase of 17.85% compared to the previous quarter. This signifies increased borrowings for the company. The debt to equity ratio for the quarter has also been the highest in the last five quarters at 0.72, showing an increase of 1.41% compared to the previous quarter. This indicates a higher financial risk for the company.

Overall, Ram Ratna Wires has shown positive financial performance in the quarter ending March 2024, with improvements in key areas such as PBT, PAT, net sales, and operating profit. However, the company needs to address its rising interest cost and debt to equity ratio to mitigate financial risk. Based on these factors, MarketsMOJO has given a 'Hold' call for the company's stock.