Reliance Chemotex Industries Reports Decline in Financial Performance for Q1 FY25

Reliance Chemotex Industries, a microcap company in the textile industry, recently announced its financial results for the quarter ending March 2024. The company’s stock has been given a ‘Sell’ call by MarketsMOJO.

According to the financial report, Reliance Chemotex has seen a significant decline in its financial performance in the last quarter, with a score of -20 compared to -6 in the previous quarter. This indicates a negative trend in the company’s financials.

One of the major factors contributing to this decline is the company’s Profit After Tax (PAT), which has decreased by 79% year on year, standing at Rs 1.05 crore for the half-yearly period. The company’s ability to manage interest payments has also deteriorated, with the Operating Profit to Interest ratio at its lowest in the last five quarters.

Moreover, Reliance Chemotex’s debt-equity ratio has been consistently increasing in the last five half-yearly periods, reaching its highest at 2.10 times. This suggests that the company is relying heavily on borrowings to fund its operations, which may lead to a stressed liquidity situation.

The company’s interest costs have also risen by 24.80% quarter on quarter, indicating an increase in borrowings. Additionally, the Operating Profit (PBDIT) for the quarter is at its lowest in the last five quarters, and the Operating Profit Margin has also decreased, highlighting a decline in the company’s efficiency.

Furthermore, the Profit Before Tax (PBT) for the quarter is at its lowest in the last five quarters, and the company’s non-operating income is significantly high compared to its PBT. This suggests that the company’s income from non-business activities is not sustainable in the long run.

Lastly, Reliance Chemotex’s cash and cash equivalents have also decreased, indicating a deteriorating short-term liquidity situation.

Overall, the financial results for the quarter ending March 2024 show a negative trend for Reliance Chemotex Industries. Investors are advised to carefully consider these factors before making any investment decisions.