Sarda Energy & Minerals' Q2 FY25 financials show mixed performance, with positive sales and profitability but rising debt and slow debtor turnover.

Sarda Energy & Minerals, a midcap company in the steel/sponge iron/pig iron industry, recently declared its financial results for the quarter ending September 2024. The stock call by MarketsMOJO for the company is ‘Hold’.

The company’s financial performance for the quarter has been flat, with a score of -4 compared to 4 in the previous quarter. However, there are some positive aspects to the company’s performance based on the September 2024 financials.

Sarda Energy’s net sales for the quarter were the highest in the last five quarters at Rs 1,158.66 crore, indicating a positive trend in sales. The operating profit (PBDIT) for the quarter was also the highest in the last five quarters at Rs 337.29 crore, showing an improvement in the company’s efficiency. The operating profit margin for the quarter was also the highest in the last five quarters at 29.11%.

The company’s profit before tax (PBT) less other income for the quarter was the highest in the last five quarters at Rs 220.94 crore, with a year-on-year growth of 36.40%. The profit after tax (PAT) for the quarter was also the highest in the last five quarters at Rs 195.40 crore, with a year-on-year growth of 38.9%. This indicates a positive trend in the company’s profitability.

On the other hand, there are some areas of concern for Sarda Energy based on the September 2024 financials. The interest cost for the quarter has increased by 53.22% compared to the previous quarter, indicating a rise in borrowings. The debt-equity ratio for the half-yearly period is also at its highest in the last five periods, indicating that the company is borrowing more to fund its operations.

Additionally, the debtors turnover ratio for the half-yearly period is at its lowest in the last five periods, indicating a slowdown in the company’s pace of settling its debtors. This could potentially impact the company’s cash flow and liquidity situation.

Overall, Sarda Energy & Minerals has shown a mixed performance in the quarter ending September 2024. While there are some positive aspects to the company’s financials, there are also some areas of concern that investors should keep in mind. MarketsMOJO’s stock call of ‘Hold’ suggests a neutral stance on the company’s stock.