Universal Starch Chem Allied Adjusts Evaluation Amid Mixed Financial Performance and Debt Concerns

Universal Starch Chem Allied, a microcap company in the chemicals industry, has recently undergone an adjustment in its evaluation. This revision reflects a shift in the technical landscape surrounding the stock, indicating a transition from a bearish outlook to a mildly bearish stance.
Key financial metrics reveal a mixed performance. The company reported a positive financial outcome for the quarter ending December 2024, following two consecutive quarters of negative results. Notably, the operating profit to interest ratio reached its highest level at 5.12 times, while the PBDIT for the quarter stood at Rs 10.49 crore. Additionally, the operating profit to net sales ratio was recorded at 8.16%, showcasing some operational efficiency.

However, the long-term fundamentals present challenges, with a 14.27% CAGR growth in net sales over the past five years and a high debt to EBITDA ratio of 3.03 times, indicating potential difficulties in servicing debt. The stock has also underperformed relative to broader market indices, generating a return of -11.39% over the past year.

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