Teesta Agro Industries Ltd., a microcap company in the Indian fertilizer industry, recently released its Q4 FY 2023-2024 results on June 12th, 2024. While the report offered some positive signs, it also presented some areas needing improvement. Let’s delve deeper into the details:
Revenue Growth, Profit Decline
Revenue: Teesta Agro saw a year-over-year (YoY) increase of 3.97% in revenue for Q4, reaching ₹39.01 Cr. This suggests a slight growth in sales compared to the same period last year.
Profit: However, the news wasn’t entirely positive. The company’s profit for Q4 fell by 21.43% YoY. This indicates a decline in profitability despite the revenue growth.
Quarterly vs. Annual Performance
Revenue: Compared to the previous quarter (Q3), Teesta Agro’s revenue dipped by a significant 19.02%. This could indicate a potential slowdown in sales momentum during the last quarter of the fiscal year. There could be several reasons behind this decline, such as seasonal fluctuations in demand for fertilizers, increased competition in the market, or temporary disruptions in the company’s supply chain. It would be helpful to analyze Teesta Agro’s historical sales data by quarter to see if this is a typical seasonal trend or a more concerning sign.
Profit: On a brighter note, the company’s profit for Q4 witnessed a significant 331.37% increase as compared to the previous quarter. This sharp rise suggests a potential recovery in profitability after a dip in Q3. Understanding the factors that contributed to this increase in profitability is important. Did Teesta Agro implement any cost-cutting measures? Did they benefit from a rise in fertilizer prices during the quarter? Having a clearer picture of these drivers would provide better insight into the company’s financial health.
Selling, General & Administrative Expenses (SG&A): Teesta Agro’s SG&A expenses saw a significant rise of 32.84% YoY and 140.54% QoQ. This increase in operational costs could be a contributing factor to the decline in profitability.
Earnings Per Share (EPS): The EPS for Q4 stood at ₹3.97, reflecting a 20.7% decrease YoY.
What Does This Mean for Teesta Agro?
Despite the mixed bag of results, Teesta Agro Industries’ stock price has been on a tear. The stock recently reached an all-time high of ₹159.98, fueled by a strong overall market performance. However, some analysts have issued a “Sell” call on the stock citing concerns about the decline in profitability and high valuation.
While the Q4 results presented a mixed picture, Teesta Agro’s overall growth trajectory remains promising. The recent revenue growth and significant QoQ profit increase suggest potential for future success. However, it’s crucial for the company to address the rising operational costs and improve its profitability margins. Investors should carefully consider these factors along with the company’s future plans and market trends before making any investment decisions.
