SPML Infra Reports Negative Q1 Results, Concerns Over Profitability and Borrowings

SPML Infra, a microcap company in the capital goods industry, recently announced its financial results for the quarter ending March 2024. According to the data released on May 31, 2024, the company has seen a negative performance in this quarter, with a score of -16 compared to 15 in the previous three months.

Despite this, there are some positive aspects to the company's financials. The net sales for the nine-month period have shown a growth of 28.29% year on year, indicating a positive trend in sales. However, there are also some concerning factors that need to be addressed. The profit before tax less other income (PBT) for the quarter has fallen by 610.24% year on year, and the profit after tax (PAT) has also seen a decline of 178.9% year on year. This suggests a very negative trend in the near term for the company's profitability.

Another concerning factor is the significant increase in interest costs, which have risen by 1,723.27% quarter on quarter. This indicates that the company has taken on more borrowings, which could impact its financial stability. The PBT for the quarter is also at its lowest in the last five quarters, and the earnings per share (EPS) have also declined, indicating lower profitability for shareholders.

On a positive note, the company has seen an increase in non-operating income, which could provide some relief. However, it is important to note that this income may not be sustainable in the long run.

Based on these financial results, MarketsMOJO has given a 'Sell' call for SPML Infra's stock. Investors should carefully consider these factors before making any investment decisions.