Mangalam Drugs Reports Q2 FY24-25 Profit Amid Debt Servicing Challenges

Mangalam Drugs and Organics, a microcap player in the Pharmaceuticals & Drugs industry, has recently undergone an evaluation adjustment reflecting its current market standing. The company has reported positive financial performance for the second quarter of FY24-25, marking a notable achievement with a profit after tax (PAT) of Rs 8.92 crore over the first nine months. This performance is complemented by a return on capital employed (ROCE) of 9, indicating a favorable valuation with an enterprise value to capital employed ratio of 1.1.
Despite these positive indicators, the company faces challenges, particularly in its ability to service debt, as evidenced by a high debt to EBITDA ratio of 4.24 times. Additionally, while the stock has generated a return of 3.66% over the past year, its long-term growth prospects appear limited, with net sales growing at an annual rate of 9.23% and operating profit at 43.90% over the last five years. The stock is currently positioned in a mildly bearish technical range, with several market indicators reflecting bearish trends.

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