Shiva Texyarn Reports Q2 FY24-25 Profit Growth Amid Long-Term Financial Concerns

Shiva Texyarn, a microcap player in the textile industry, has recently undergone an evaluation adjustment reflecting changes in its underlying financial metrics. The company reported a notable profit after tax (PAT) of Rs 2.77 crore for the second quarter of FY24-25, showcasing a substantial growth rate. Additionally, net sales for the quarter reached Rs 95.19 crore, indicating a positive trend in revenue generation.
The company's operating profit to interest ratio stands at 3.19 times, highlighting its capacity to manage interest obligations effectively. Technical indicators suggest that the stock is positioned within a bullish range, with various metrics showing favorable movements.

However, it is essential to consider the long-term fundamentals, as the company has experienced a compound annual growth rate (CAGR) of -27.75% in operating profits over the past five years. Furthermore, the high debt-to-EBITDA ratio of 12.80 times raises concerns about financial leverage. The average return on equity of 2.06% points to challenges in achieving profitability relative to shareholder investments.

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