TVS Srichakra's Q2 financials show mixed results, with potential areas of concern

TVS Srichakra, a smallcap company in the tyres and allied industry, recently announced its financial results for the quarter ending September 2024. The company's stock has been given a 'Strong Sell' call by MarketsMOJO.

According to the financial report, TVS Srichakra has seen a negative performance in the second quarter of the fiscal year 2024-2025, with a score of -11, which has improved from -12 in the last three months.

However, there are some positive aspects to the company's financials. The operating cash flow for the year is at its highest at Rs 227.96 crore and has been growing consistently over the past three years. The net sales for the quarter are also at their highest at Rs 841.74 crore, showing a positive trend in the near term. Additionally, the company has a high dividend payout ratio of 33.59%, indicating that it is distributing a higher proportion of its profits as dividends.

On the other hand, there are some areas of concern for TVS Srichakra. The profit before tax (PBT) for the quarter has fallen by 54.6% compared to the average PBT of the previous four quarters. The profit after tax (PAT) has also seen a significant decline of 59.1% compared to the average PAT of the previous four quarters. The company's interest costs have also increased, indicating a rise in borrowings. The debt-equity ratio is at its highest in the last five half-yearly periods, which could potentially lead to liquidity issues. Moreover, the non-operating income for the quarter is at its highest in the last five quarters, which may not be sustainable.

Overall, TVS Srichakra's financial performance for the quarter ending September 2024 has been mixed, with some positive and negative aspects. Investors should carefully consider these factors before making any investment decisions.