Fertilizers & Chemicals Travancore Reports 78.8% Drop in Quarterly Profit After Tax

Dec 23 2024 06:44 PM IST

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Fertilizers & Chemicals Travancore has recently experienced a revision in its score by MarketsMojo, reflecting ongoing challenges in its financial performance. The company has reported negative results for six consecutive quarters, with a notable decline in profit after tax and net sales. Despite its market leadership, the stock's valuation remains high. In a recent analysis, MarketsMojo has adjusted its evaluation of Fertilizers & Chemicals Travancore, highlighting the company's struggles with profitability and declining sales figures. The firm, which commands a significant share of the fertilizers sector, has seen its profit after tax drop sharply, alongside a decrease in net sales for the half-year. While the company maintains a low debt-to-equity ratio and has demonstrated long-term growth, the current financial metrics raise concerns about its valuation, as indicated by the recent call changes.

Fertilizers & Chemicals Travancore, a prominent player in the fertilizers industry, is currently facing significant challenges as it reports negative results for the last six consecutive quarters. The company's profit after tax for the latest quarter stands at Rs 11.19 crore, reflecting a sharp decline of 78.8%. Additionally, net sales for the half-year have decreased by 29.27%, totaling Rs 2,048.21 crore.

Despite being a large-cap company with a market capitalization of Rs 61,213 crore, Fertilizers & Chemicals Travancore's return on capital employed (ROCE) has reached a low of 7.65%. The company's return on equity (ROE) is recorded at 8.1, indicating a high valuation with a price-to-book ratio of 46.2.

Interestingly, domestic mutual funds hold only a minimal stake of 0.32% in the company, which may suggest caution regarding its current valuation or business outlook. On a positive note, the company has demonstrated consistent returns over the past three years, outperforming the BSE 500 index annually. With annual sales of Rs 4,207.36 crore, it constitutes 30.26% of the sector, highlighting its significant market presence.

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