REC Ltd's Q4 financials show positive growth, highest net sales and operating profit

REC Ltd, a largecap finance company, has recently declared its financial results for the quarter ended March 2024. The company has shown a positive performance with a score of 14, which is an improvement from 6 in the last 3 months.

One of the key highlights of the financials is the increase in net sales, which has been the highest at Rs 12,677.18 crore and has grown consistently in the last five quarters. This indicates a very positive sales trend in the near term. The operating profit (PBDIT) has also seen a significant increase, reaching its highest at Rs 13,101.73 crore in the last five quarters. This shows a positive trend in the near term for the company's operating profit.

Another positive aspect is the profit before tax (PBT) less other income, which has also reached its highest at Rs 5,200.00 crore in the last five quarters. This is a growth of 25.4% over the average PBT of the previous four quarters, indicating a positive trend in the near term. The profit after tax (PAT) has also shown a similar trend, with the highest at Rs 4,079.09 crore in the last five quarters and a growth of 24.3% over the average PAT of the previous four quarters.

The company's earnings per share (EPS) have also seen an increase, reaching its highest at Rs 15.49 in the last five quarters. This shows that the company has been able to create higher earnings for its shareholders.

However, there are some areas that need improvement. The debt-equity ratio has been the highest at 6.74 times and has grown consistently in the last five half-yearly periods. This indicates that the company is borrowing more to fund its operations, which may lead to a stressed liquidity situation. Additionally, the non-operating income has also seen an increase, reaching its highest at Rs 29.48 crore in the last five quarters. This may not be sustainable in the long run.

Overall, REC Ltd has shown a positive financial performance in the quarter ended March 2024. With increasing sales, operating profit, and profit after tax, the company has been able to create higher earnings for its shareholders. However, it needs to address its debt-equity ratio and non-operating income to ensure sustainable growth in the future. Based on these financials, MarketsMOJO has given a 'Buy' call for REC Ltd's stock.