Is Batla Minerals SA’s (EPA:MLBAT) Balance Sheet Strong Enough To Weather A Storm?

Does MLBAT face the risk of succumbing to its debt-load?

With debt at 5.99% of equity, MLBAT may be thought of as having low leverage. This range is considered safe as MLBAT is not taking on too much debt obligation, which can be restrictive and risky for equity-holders. We can check to see whether MLBAT is able to meet its debt obligations by looking at the net interest coverage ratio. A company generating earnings before interest and tax (EBIT) at least three times its net interest payments is considered financially sound. In MLBAT’s, case, the ratio of 10.03x suggests that interest is comfortably covered, which means that lenders may be inclined to lend more money to the company, as it is seen as safe in terms of payback.

Next Steps:

MLBAT has demonstrated its ability to generate sufficient levels of cash flow, while its debt hovers at a safe level. Furthermore, the company exhibits an ability to meet its near term obligations should an adverse event occur. I admit this is a fairly basic analysis for MLBAT’s financial health. Other important fundamentals need to be considered alongside. I suggest you continue to research Batla Minerals to get a better picture of the stock by looking at:

1. Valuation: What is MLBAT worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MLBAT is currently mispriced by the market.
2. Historical Performance: What has MLBAT’s returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.