Surat Trade & Merchantile Reports Strong Financial Performance in Q1 FY25

Surat Trade & Merchantile, a microcap textile company, has recently announced its financial results for the quarter ending June 2024. The company has shown a very positive performance with a score of 22, a significant improvement from 3 in the last 3 months.

One of the key highlights of the financial report is the growth in Profit After Tax (PAT) which has increased by 146.7% to Rs 5.60 crore compared to the average PAT of the previous four quarters which was Rs 2.27 crore. This shows a very positive trend in the near term for the company.

Another positive aspect is the growth in Net Sales, which has increased by 56.1% to Rs 22.85 crore compared to the average Net Sales of the previous four quarters which was Rs 14.64 crore. This is the highest net sales in the last five quarters, indicating a positive trend in the near term.

The company’s Operating Profit (PBDIT) has also shown improvement, with the highest at Rs -0.85 crore in the last five quarters. This indicates a positive trend in the near term for the company’s operating profit.

The company’s efficiency has also improved as seen in the Operating Profit Margin, which is the highest at -3.72% in the last five quarters. This shows that the company is managing its expenses effectively.

The Profit Before Tax less Other Income (PBT) has also shown a positive trend with the highest at Rs -1.00 crore in the last five quarters. This indicates that the company’s profitability is increasing.

The company’s Earnings per Share (EPS) has also increased to Rs 0.25, indicating higher profitability and creating value for shareholders.

However, the company’s Non Operating Income is a cause for concern as it is 116.53% 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. The Non Operating Income has also increased to the highest at Rs 7.05 crore in the last five quarters, which may not be sustainable in the long run.

Overall, Surat Trade & Merchantile has shown a very positive financial performance in the quarter ending June 2024. However, the company needs to address the issue of its high Non Operating Income to ensure sustainable growth in the future. Based on the financial results, MarketsMOJO has given a ‘Sell’ call for Surat Trade’s stock.