Pasupati Spinning & Weaving Mills Faces Financial Challenges Amidst Market Evaluation Adjustments

Pasupati Spinning & Weaving Mills, a microcap player in the textile industry, has recently undergone an adjustment in evaluation, reflecting changes in its underlying financial metrics and market position. The company's financial performance for the second quarter of FY24-25 has shown net sales of Rs 24.28 crore, which indicates a contraction compared to the previous period.
Key financial indicators reveal a compound annual growth rate (CAGR) of 6.63% in operating profits over the last five years, suggesting challenges in sustaining growth. The company's debt-to-EBITDA ratio stands at 18.36 times, which raises concerns about its capacity to manage debt obligations effectively. Additionally, the average return on equity is recorded at 2.16%, pointing to limited profitability in relation to shareholders' equity.

The liquidity position appears strained, with cash and cash equivalents reported at Rs 1.29 crore, while the debtors turnover ratio has reached a low of 3.54 times. Despite these financial hurdles, some technical indicators suggest a bullish range for the stock, although the overall outlook remains cautious for Pasupati Spinning & Weaving Mills.

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