Z F Steering's Q2 FY25 financials show mixed results, with concerns over profitability and liquidity

Z F Steering Gear (India), a smallcap auto ancillary company, recently declared its financial results for the quarter ending September 2024. According to MarketsMOJO, a leading stock analysis platform, the stock call for Z F Steering is ‘Sell’.

The company has reported a negative financial performance for the quarter, with a score of -17 compared to -1 in the previous quarter. However, there are some positive aspects to the financials as well.

Based on the September 2024 financials, Z F Steering has shown a strong Debtors Turnover Ratio, with the highest at 5.06 times in the last five half yearly periods. This indicates that the company has been able to settle its debtors faster.

In terms of dividend distribution, Z F Steering has also performed well, with the highest Dividend per Share (DPS) of Rs 8.00 in the last five years. This shows that the company is distributing higher dividends from its profits.

However, there are some areas of concern in the financials as well. The Profit Before Tax less Other Income (PBT) for the quarter has fallen by -83.9% compared to the average of the previous four quarters. The same trend can be seen in the Profit After Tax (PAT), which has fallen by -83.7% compared to the average of the previous four quarters.

The company’s net sales for the quarter have also decreased by -8.3% compared to the average of the previous four quarters. This is a cause for concern as it shows a negative trend in the company’s sales.

Moreover, the Non Operating Income for the quarter is 91.06% of the Profit Before Tax (PBT), indicating that the company’s income from non-business activities is high. This may not be a sustainable business model in the long run.

The company’s Earnings per Share (EPS) for the quarter is also at its lowest in the last five quarters, showing a decline in profitability and lower earnings for shareholders.

In terms of liquidity, Z F Steering’s Cash and Cash Equivalents for the half yearly period is at its lowest in the last six periods, indicating a deteriorating short-term liquidity.

Overall, while Z F Steering has shown some positive aspects in its financials, there are also some areas of concern that investors should take note of before making any investment decisions.