Rico Auto Industries Experiences Financial Turnaround Amid Ongoing Market Challenges

Sep 23 2025 08:38 AM IST
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Rico Auto Industries has recently experienced a change in its evaluation, reflecting shifts in its technical grade. The company reported a notable operating profit after several quarters of losses, alongside improvements in its financial ratios. However, challenges remain, including a decline in stock performance and modest sales growth.
Rico Auto Industries, a microcap player in the auto components and equipment sector, has recently undergone an adjustment in evaluation, reflecting a shift in its technical grade. This revision is attributed to various underlying trends observed in the company's performance metrics.

In the latest quarter, Rico Auto Industries reported a notable operating profit, marking a significant turnaround after four consecutive quarters of negative results. The operating profit to interest ratio reached its highest level at 4.05 times, while the debt-equity ratio stood at a low of 0.96 times, indicating a more favorable financial structure. Additionally, the company achieved a PBDIT of Rs 53.88 crore, showcasing its operational capabilities.

Despite these positive indicators, the stock has faced challenges over the past year, with a return of -10.40% and a decline in profits by -15.3%. The company's ability to service debt remains a concern, highlighted by a high debt to EBITDA ratio of 3.87 times. Furthermore, the net sales growth over the last five years has been modest at an annual rate of 13.45%.

Overall, while Rico Auto Industries has demonstrated some positive financial performance, the market dynamics and technical indicators have prompted a reevaluation of its stock score.

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