RCF's Q1 Financial Results Show Negative Performance, Concerns for Investors

Rashtriya Chemicals & Fertilizers (RCF), a midcap company in the fertilizer industry, recently declared its financial results for the quarter ending June 2024. According to the latest report, the company has seen a very negative performance in this quarter, with a score of -24 compared to -17 in the previous quarter.

The Profit Before Tax (PBT) less Other Income has fallen by -140.86% year on year, standing at Rs -13.80 crore. This trend is expected to continue in the near term. Similarly, the Profit After Tax (PAT) has also fallen by -78.0% year on year, with a value of Rs 10.80 crore. This downward trend in profitability is a cause for concern.

One of the major factors contributing to this decline is the rising interest cost, which has grown by 34.63% quarter on quarter, standing at Rs 69.98 crore. This signifies increased borrowings by the company. Moreover, the company's ability to manage interest payments has deteriorated, with the Operating Profit to Interest ratio being the lowest in the last five quarters.

The Non-Operating Income for this quarter is 184.46% of the Profit Before Tax (PBT), indicating that the company's income from non-business activities is high. This is not a sustainable business model in the long run.

The Earnings per Share (EPS) for this quarter is the lowest in the last five quarters, standing at Rs 0.20. This decline in profitability has resulted in lower earnings for shareholders.

Based on these financial results, MarketsMOJO has given a 'Hold' call for RCF's stock. Investors are advised to closely monitor the company's performance in the upcoming quarters.