Active Clothing Co Reports Strong Growth Amid Management Efficiency Challenges

Active Clothing Co, a microcap player in the Garments & Apparels industry, has recently undergone an evaluation adjustment, reflecting a revision in its score. The company reported positive financial performance for the quarter Q1 FY25-26, showcasing a significant growth trajectory with net sales increasing at an annual rate of 32.68% and operating profit rising by 57.11%.
Despite these positive indicators, the company faces challenges in management efficiency, as evidenced by a Return on Capital Employed (ROCE) of 9.07%, which suggests limited profitability relative to total capital. Additionally, the high Debt to EBITDA ratio of 4.65 times indicates a constrained ability to service debt obligations. The Return on Equity (ROE) stands at 8.06%, further highlighting the need for improvement in profitability per unit of shareholders' funds.

On a positive note, Active Clothing Co has declared positive results for the last four consecutive quarters, with a notable growth in profit after tax (PAT) of 125.88% over the latest six months. The stock has outperformed the broader market, generating a return of 26.15% over the past year, while the market index (BSE500) has seen negative returns.

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