Reliance Communications Announces Q1 FY25 Financial Results, Shows Mixed Performance

Reliance Communications, a microcap telecom provider, recently announced its financial results for the quarter ending June 2024. The company’s stock has been given a ‘Sell’ call by MarketsMOJO.

According to the financials, Reliance Communications has shown a flat performance in the quarter, but there are some positive indicators. The company’s operating profit to interest ratio has improved to 1.17 times, indicating an improvement in its ability to manage interest payments. The operating profit (PBDIT) for the quarter was also the highest in the last five quarters, at Rs 14.00 crore, showing a positive trend in the near term. The operating profit margin has also increased to 14.43%, indicating improved efficiency.

The profit before tax (PBT) less other income for the quarter was the highest in the last five quarters, at Rs 2,171.00 crore, showing a positive trend in the near term. This is also a 25.4% growth over the average PBT of the previous four quarters. The profit after tax (PAT) for the quarter was also the highest in the last five quarters, showing a positive trend in the near term.

However, there are some areas where Reliance Communications needs to improve. The debt-equity ratio for the half-yearly period was the highest in the last five periods, indicating that the company is borrowing more to fund its operations. This could lead to a stressed liquidity situation. The earnings per share (EPS) for the quarter was the lowest in the last five quarters, showing a decline in profitability. The company’s cash and cash equivalents for the half-yearly period were also the lowest in the last six periods, indicating a deteriorating short-term liquidity situation. The debtors turnover ratio for the half-yearly period was also the lowest in the last five periods, showing a slowdown in the company’s pace of settling its debtors.

Overall, Reliance Communications has shown a mixed performance in the quarter, with some positive indicators but also some areas that need improvement. Investors should carefully consider these factors before making any investment decisions.