Vishal Fabrics posts mixed Q1 result

Microcap textile player Vishal Fabrics has reported a mixed performance for the quarter ending June 2024. While the company showed improvement over the previous quarter, with a score of -7 compared to -14, certain key metrics reveal contrasting picture.

On the positive side, Vishal Fabrics' net sales increased to five-quarter high of Rs 411.51 crore, indicating strong demand for its products. Operating profit (PBDIT) also reached a five-quarter peak of Rs 30.16 crore, driven by improved efficiency as reflected in the highest-ever operating profit margin of 7.33 per cent.

However, the company's bottom line took a hit. Profit after tax (PAT) dropped 38.9 per cent year-on-year to Rs 6.52 crore, marking a negative trend. This decline can be attributed to a substantial 13.88 per cent quarter-on-quarter increase in interest costs, the highest in five quarters, suggesting increased borrowings.

While the recent quarter's performance offers some positive indicators, mounting debt burden and declining profits raise concerns.