SG Mart's Q2 financials show strong sales and PAT growth, but concerns remain

SG Mart, a smallcap textile company, has recently announced its financial results for the quarter ending September 2024. The stock call by MarketsMOJO for SG Mart is 'Sell'.

Despite the negative stock call, SG Mart has shown a very positive financial performance in the second quarter of the fiscal year 2024-2025. The company's score has fallen from 30 to 23 in the last 3 months, indicating a strong growth trend.

According to the financials, SG Mart's net sales for the quarter have grown by 252.91% year on year, reaching Rs 1,786.59 crore. This is the highest net sales in the last five quarters, showing a positive sales trend in the near term. Similarly, the company's profit after tax (PAT) has also shown a growth of 87.0% year on year, reaching Rs 16.74 crore. This indicates a very positive trend in the near term for PAT.

However, there are some areas that are not performing well for SG Mart. The profit before tax less other income (PBT) for the quarter has fallen by -87.13% year on year, reaching Rs 1.40 crore. This is the lowest PBT in the last five quarters, showing a very negative trend in the near term. Additionally, the non-operating income for the quarter is 93.72% of the PBT, indicating a high reliance on non-business activities which may not be sustainable in the long run. The earnings per share (EPS) for the quarter is also at its lowest in the last five quarters, at Rs 1.49, showing a declining profitability and lower earnings for shareholders.

Overall, SG Mart has shown a strong financial performance in terms of net sales and PAT, but there are some areas of concern such as declining PBT and high reliance on non-business income. Investors should carefully consider these factors before making any investment decisions.