Narmada Agrobase Reports Strong Growth Amid Long-Term Financial Concerns

Narmada Agrobase, a microcap player in the FMCG sector, has recently undergone an adjustment in its evaluation. The company has reported positive financial performance for the quarter Q1 FY25-26, showcasing a notable growth trajectory. Over the past nine months, the company has achieved a profit after tax (PAT) of Rs 2.80 crore, reflecting a growth rate of 59.09%. Additionally, net sales during the same period reached Rs 54.22 crore, marking a growth of 25.42%.
Despite these positive indicators, the company faces challenges in its long-term fundamental strength, evidenced by an average Return on Capital Employed (ROCE) of 8.47% and a high Debt to EBITDA ratio of 3.03 times, which raises concerns about its ability to service debt. The company's return on equity (ROE) stands at 7.3, and it is trading at a price-to-book value of 1.5, indicating an attractive valuation relative to its peers.

Narmada Agrobase has consistently delivered positive results for the last six consecutive quarters and has outperformed the market, generating a return of 39.06% over the past year, significantly surpassing the BSE500's return of 4.43%.

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