we enclose here with: - the Standalone Un-audited Financial Results for the quarter ended 30th September, 2025 alongwith the Statement of Assets and liabilites and Cash Flow statements. - ....
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Avon Mercantile Ltd reported strong topline growth for Q2 FY26, with total income rising to ₹122.29 lakhs from ₹53.96 lakhs in the year-ago quarter (over 2x growth). For the half-year ended September 2025, total income surged to ₹240.20 lakhs versus ₹78.65 lakhs in H1 FY25, roughly 205% higher. The company swung to a profit before tax of ₹36.93 lakhs in H1 FY26 from a loss of ₹0.72 lakhs in H1 FY25, with Q2 standalone PBT at ₹18.95 lakhs (EPS ₹0.25). The business operates as a single-segment loan company. Auditor Gupta Garg & Agrawal issued a clean (unmodified) limited review report. However, the balance sheet shows borrowings of ₹3,292.76 lakhs against total equity of just ₹549.31 lakhs, and operating cash flow was negative (₹-3.85 lakhs for the half-year), with cash balance declining to a thin ₹2.34 lakhs.
The sharp revenue and profit turnaround is a positive signal for shareholders, but the very high leverage (~6x debt-to-equity), negative operating cash flow, and minimal cash reserves are red flags that warrant caution despite the improved earnings.