Kaya Ltd Faces Financial Struggles Amid Declining Sales and Negative Book Value

Kaya Ltd, a microcap company in the leisure services industry, has recently undergone an adjustment in its evaluation. This revision reflects the company's ongoing challenges, particularly highlighted by its negative financial performance in the fourth quarter of FY24-25. The company has reported a negative book value, indicating weaknesses in its long-term fundamental strength.
Over the past five years, Kaya's net sales have contracted at an annual rate of 10.45%, showcasing a trend of poor long-term growth. The latest six-month figures reveal net sales of Rs 112.81 crore, which have declined by 26.85%. Additionally, the profit after tax (PAT) for the same period stands at Rs -22.54 crore, also reflecting a decrease of 26.85%.

Kaya's cash and cash equivalents have reached a low of Rs 7.39 crore, further emphasizing its financial difficulties. The company's ability to service its debt is concerning, as indicated by a poor EBIT to interest ratio of -6.21. Despite the company's size, domestic mutual funds hold no stake, which may suggest a lack of confidence in its current valuation or business model.

In the past year, Kaya's stock has underperformed the market significantly, with a return of -25.16%, compared to the BSE500's negative return of -0.19%.

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