Universal Starch Chem Shows Financial Improvement Amid Long-Term Debt Concerns

Universal Starch Chem Allied has recently undergone an adjustment in its evaluation, reflecting the company's current standing within the chemicals industry. The latest assessment highlights a mix of financial metrics that provide insight into its operational health.
In the most recent quarter, Q3 FY24-25, Universal Starch reported positive financial performance, marking a notable turnaround after two consecutive quarters of negative results. Key indicators such as Operating Profit to Interest reached a high of 5.12 times, while the PBDIT for the quarter stood at Rs 10.49 crore, showcasing the company's ability to generate earnings. Additionally, the Operating Profit to Net Sales ratio was recorded at 8.16%, indicating effective cost management.

Despite these positive developments, the company faces challenges with long-term fundamental strength, evidenced by a 14.27% CAGR growth in Net Sales over the past five years and a high Debt to EBITDA ratio of 3.03 times, which raises concerns about its debt servicing capacity.

Overall, the stock's performance has outpaced the broader market, generating a return of 12.81% over the past year, significantly higher than the BSE 500's return of 0.24%.

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