STC Reports Strong Financial Performance in Q1 FY25, But Non-Operating Income Raises Concerns

The State Trading Corporation of India (STC) has recently announced its financial results for the quarter ended June 2024. The company, which operates in the trading industry and is classified as a smallcap, has shown positive performance in this quarter.

According to the financial report, STC’s Profit After Tax (PAT) for the quarter has grown by 134.6% compared to the average PAT of the previous four quarters. This is a significant improvement and the near term trend for PAT is also positive. Additionally, the company’s PAT for this quarter is the highest in the last five quarters, indicating a strong financial performance.

Another positive aspect of STC’s financials is its Earnings per Share (EPS) for the quarter, which is the highest in the last five quarters. This shows that the company has been able to generate higher earnings for its shareholders.

In terms of liquidity, STC’s Cash and Cash Equivalents for the half-yearly period is the highest in the last six periods. This indicates an improvement in short-term liquidity for the company.

However, there are some areas that need improvement for STC. The Non Operating Income for the quarter is 144.66% of the Profit Before Tax (PBT). This means that the company’s income from non-business activities is high, which may not be a sustainable business model. Additionally, the Non Operating Income for this quarter is the highest in the last five quarters, which may not be sustainable in the long run.

In conclusion, STC has shown positive financial performance in the quarter ended June 2024, with improvements in PAT, EPS, and liquidity. However, the company needs to address its high non-operating income and ensure a sustainable business model for long-term success. Based on these financials, MarketsMOJO has given a ‘Sell’ call for STC’s stock.