VRL Logistics' Q1 financials show mixed results, with high operating cash flow but declining profitability

VRL Logistics, a smallcap logistics company, recently declared its financial results for the quarter ended June 2024. The company's stock has been given a 'Sell' call by MarketsMOJO.

According to the financials, VRL Logistics has seen a flat performance in the quarter, with a score of -1 compared to 17 in the previous quarter. However, there are some positive aspects to the company's financials. The inventory turnover ratio for the half-yearly period is at its highest at 70.13 times and has grown consistently in the last five half-yearly periods. This indicates that the company has been able to sell its inventory at a faster rate.

Additionally, the company has generated a high operating cash flow of Rs 423.92 crore annually in the last three years, indicating strong cash revenues from business operations.

On the other hand, there are some concerning factors in VRL Logistics' financials. The profit before tax less other income (PBT) for the quarter has fallen by -88.6% compared to the average PBT of the previous four quarters. The profit after tax (PAT) has also fallen by -39.5% compared to the average PAT of the previous four quarters. The company's ability to manage interest payments has also deteriorated, with the operating profit to interest ratio at its lowest in the last five quarters.

Moreover, the company's operating profit margin and PBT have also seen a decline in the last five quarters. The company's high non-operating income, which is 83.92% of its PBT, may not be sustainable in the long run. The earnings per share (EPS) have also decreased, indicating declining profitability and lower returns for shareholders.

Furthermore, VRL Logistics' debt-equity ratio is at its highest in the last five half-yearly periods, indicating increased borrowing to fund its operations. The company's high non-operating income may also not be sustainable in the long run.

Overall, VRL Logistics' financial performance for the quarter ended June 2024 has been flat, with some positive and negative aspects. Investors should carefully consider these factors before making any investment decisions.