MSTC down in red

MSTC Ltd is among the top five losers on the BSE; from its close of Rs.963.30, it opened lower at Rs.944.05 and went down to an intraday low at Rs.906.05, down 6%. Its 52-week high and low stands at Rs.1165 and Rs.300.60 respectively.

The market is disappointed with the performance of this Mini-Ratna PSU. The company, apart from trading in metal scrap has also diversified into e-commerce related services across diversified industry segment offering e-auction/e-sale, e-procurement services and development of customized software/solutions. The company is a pioneer in the e-auction segment catering to the Government sector, partnering with different Government agencies and ministries in conducting e-Auction.

For Q4FY24, the company posted a consolidated net revenue of Rs.199 crore, up 1.5% (YoY). PBT was down 4% at Rs.107 crore and this can be blamed on the Rs.103 crore added up in total expenses as provisions and write-offs. PAT for the quarter was down 38% at Rs.48 crore, down 38%.

In FY24, the company opted for lower tax regime under the said Section for the financial year ended J l March, 2024 and onwards. resulting in reduction of current tax by Rs.2.53 crore and additional charge of Rs.1.23 crore to Other Comprehensive Income. Consequently, the company has charged off the Deferred Tax Assets arising due to MAT credit and restated the Deferred Tax Assets, based on the revised effective tax rate 25.168%, resulting in one time charge of Deferred tax of Rs.37 crore for Q4FY24 and FY24. This mainly impacted the bottomline.