Swadeshi Polytex Reports Positive Net Sales, But Profitability Shows Decline

Swadeshi Polytex, a smallcap textile company, has recently declared its financial results for the quarter ending March 2024. According to the latest report, the company has seen a positive financial performance with a score of 8, which is a significant improvement from the previous score of 32 in the last 3 months.

One of the major factors contributing to this positive performance is the company's net sales, which have grown by 108.52% year on year, reaching Rs 54.55 crore in the half-yearly period. This indicates a very positive sales trend for Swadeshi Polytex.

However, there are some areas that need improvement for the company. The profit before tax less other income (PBT) for the quarter has fallen by -105.8% compared to the average PBT of the previous four quarters, which was Rs 27.25 crore. This shows a very negative trend in the near term for PBT.

Similarly, the profit after tax (PAT) for the quarter has also fallen by -98.4% compared to the average PAT of the previous four quarters, which was Rs 23.75 crore. This indicates a negative trend in the near term for PAT.

The operating profit (PBDIT) for the quarter is also at its lowest in the last five quarters, standing at Rs -1.69 crore. This shows a negative trend in the near term for operating profit.

Moreover, the company's non-operating income for the quarter is 895.00% of the profit before tax, which indicates that a significant portion of the company's income is coming from non-business activities. This is not a sustainable business model and may affect the company's long-term profitability.

Lastly, the earnings per share (EPS) for the quarter is at its lowest in the last five quarters, standing at Rs 0.03. This shows a declining profitability trend and may not be favorable for shareholders.

In conclusion, while Swadeshi Polytex has shown positive growth in terms of net sales, there are some areas that need improvement for the company to maintain a sustainable and profitable business model. As per MarketsMOJO, the stock call for Swadeshi Polytex is 'Hold'.