Gujarat Toolroom Limited has reported a standalone net profit of Rs 366.31 lakh for the first quarter, according to the company's latest financial results. This marks an increase from Rs 271.78 lakh in the corresponding quarter of the previous year.

Revenue Performance

The company's revenue from operations, however, saw a significant decline. Gujarat Toolroom reported standalone revenue of Rs 1,450.68 lakh for Q1, compared to Rs 6,584.50 lakh in the same quarter last year, representing a decrease of about 78%.

Segment-wise Performance

For the quarter under review, the Agricultural Products segment was the sole revenue generator, contributing the entire Rs 1,450.68 lakh. Other segments, including Construction Material, Rough Diamonds & Gold, and Others (comprising Fabrics, Shares Trading, and Pharma), did not report any revenue for the quarter.

Consolidated Results

On a consolidated basis, the company's performance mirrored its standalone results:

All figures in Rs lakh

Earnings Per Share

The basic earnings per share (EPS) for the quarter stood at:

• Standalone: Rs 0.03
• Consolidated: Rs 0.04

Financial Position

As of the end of the quarter, Gujarat Toolroom's total assets stood at:

• Standalone: Rs 53,735.72 lakh
• Consolidated: Rs 104,643.42 lakh

The company's liabilities matched its assets for both standalone and consolidated figures.

Management Commentary

The company's board meeting to approve these results commenced at 4:00 PM and concluded around 5:00 PM on August 11. The financial results have been reviewed by the Audit Committee and approved by the Board of Directors.

Gujarat Toolroom Limited continues to navigate a challenging business environment, as evidenced by the significant revenue decline. However, the company has managed to improve its profitability compared to the same quarter last year. The Agricultural Products segment being the sole revenue contributor in Q1 highlights the company's current focus and market conditions.

Gujarat Toolroom Limited , a diversified company with interests in construction materials, rough diamonds, gold, and other sectors, has announced a significant corporate action alongside its third-quarter results for the fiscal year 2024-25.

Bonus Share Allotment

The company's board of directors has approved the allotment of 116,03,28,150 bonus equity shares in a 5:1 ratio. This means shareholders will receive five new equity shares for every one share held, as recorded on the fixed record date of February 18, 2025. This move will significantly increase the company's paid-up equity share capital from ₹23.21 crore to ₹139.24 crore.

Q3 Financial Performance

For the quarter ended December 31, 2024, Gujarat Toolroom reported mixed financial results:

The company witnessed a substantial year-on-year revenue growth of 76%, with total income rising to ₹231.23 crore in Q3 FY2024-25 from ₹131.08 crore in the same quarter of the previous year. However, net profit saw a significant decline of 90%, dropping to ₹1.43 crore from ₹14.32 crore in the corresponding quarter.

Segment-wise Performance

Gujarat Toolroom's consolidated financial results reveal diverse performance across its business segments:

• Rough Diamonds & Gold: This segment emerged as the primary revenue driver, contributing ₹196.85 crore to the total revenue.
• Others (Fabrics, Shares Trading, Pharma, etc.): This segment generated ₹33.89 crore in revenue.
• Construction Material and Agricultural Products: These segments did not report any revenue for the quarter.

Market Response

Following the announcement, Gujarat Toolroom's stock hit the 5% lower circuit at ₹2.34 per share on the stock exchange. This market reaction suggests that investors may be concerned about the sharp decline in profitability despite the revenue growth and the bonus share announcement.

Auditor's Observations

The company's auditors have highlighted several points of concern in their limited review report:

1. Three purchase invoices amounting to ₹63.17 lakh were not found, although recorded in the books.
2. Inability to physically verify the stock as of December 31, 2024, due to lack of adequate documentation.
3. Discrepancies in agricultural goods transactions from the previous quarter, including missing invoices for sales and purchases.

These observations raise questions about the company's internal controls and financial reporting processes, which may require management attention.

Looking Ahead

While the bonus share issuance is likely to be viewed positively by shareholders, the significant drop in profitability and the auditor's concerns may pose challenges for Gujarat Toolroom. The company's ability to address these issues and improve its bottom line will be crucial for investor confidence in the coming quarters.

Investors and market watchers will be keenly observing how Gujarat Toolroom navigates these challenges and capitalizes on its revenue growth to restore profitability in the future quarters.