Vardhman Acrylics Faces Financial Challenges Amidst Strong Debtors Turnover Ratio

Vardhman Acrylics, a microcap player in the textile industry, has recently experienced a financial trend adjustment reflecting challenges in its performance metrics. The company's financial performance for the quarter ending March 2025 has shown a notable decline, with its score dropping significantly over the past three months.
On a positive note, Vardhman Acrylics has achieved a remarkable debtors turnover ratio of 32.14 times, indicating efficient management of receivables. However, several key performance indicators are raising concerns. The profit after tax for the quarter stands at Rs 1.96 crore, reflecting a substantial decline of 48.3% compared to the previous four-quarter average. Additionally, the return on capital employed is at a low of 6.83%, and the inventory turnover ratio has also reached a concerning low of 3.48 times.

The operating profit to net sales ratio is currently at -0.01%, and the profit before depreciation, interest, and tax is recorded at Rs -0.01 crore. Furthermore, non-operating income constitutes a significant 137.92% of profit before tax, highlighting reliance on non-core activities.

In terms of market performance, Vardhman Acrylics has underperformed compared to the Sensex over various time frames, particularly in the year-to-date and one-year comparisons, where it has seen declines of 21.93% and 26.30%, respectively. This trend underscores the challenges the company faces in a competitive market environment.