SRG Housing Finance Reports Positive Q2 Results, But Cash Flow and Liquidity Need Improvement

SRG Housing Finance, a microcap company in the finance-housing industry, has recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Hold' call by MarketsMOJO.

According to the financial report, SRG Housing has shown positive performance in the second quarter of the fiscal year 2024-2025. The company's score has improved from 9 to 12 in the last three months.

One of the key factors contributing to this positive performance is the growth in net sales, which has increased by 22.38% year on year to Rs 69.83 crore. The company's operating profit (PBDIT) for the quarter is also at its highest in the last five quarters, standing at Rs 24.08 crore. This indicates a positive trend in the company's profitability.

Moreover, SRG Housing's operating profit margin has also shown improvement, reaching its highest at 66.78% in the last five quarters. This indicates that the company has become more efficient in managing its operations.

The company's profit before tax (PBT) has also seen a significant increase, with the quarterly PBT at Rs 7.55 crore, which is a growth of 34.58% year on year. Similarly, the profit after tax (PAT) has also shown a positive trend, with the quarterly PAT at Rs 6.60 crore, a growth of 25.5% year on year.

The company's earnings per share (EPS) have also increased, reaching its highest at Rs 4.62 in the last five quarters. This indicates that the company has been able to generate higher earnings for its shareholders.

However, there are some areas where SRG Housing needs to improve. The company's operating cash flow has been consistently falling in the last three years, with the latest figure at Rs -140.13 crore. This indicates that the company's cash revenues from business operations are declining.

Additionally, the company's short-term liquidity has also deteriorated, with the cash and cash equivalents at its lowest in the last six half-yearly periods at Rs 19.53 crore.

Overall, SRG Housing Finance has shown positive financial performance in the quarter ending September 2024. However, the company needs to address its declining cash flow and liquidity to sustain its growth in the long run. Investors are advised to hold their positions in the company's stock for now.