Hazoor Multi Projects Ltd Downgraded to Strong Sell Amid Weak Financials and Bearish Technicals

Quality Assessment: Persistent Financial Weakness

Hazoor Multi Projects Ltd’s financial quality has notably deteriorated over recent quarters. The company reported very negative results for Q2 FY25-26, with net sales declining by 15.22% year-on-year. This marks the eighth consecutive quarter of negative earnings, underscoring a sustained period of operational challenges. The quarterly PAT plunged to a loss of ₹9.93 crores, representing a staggering fall of 189.6% compared to the previous four-quarter average.

Operating cash flow for the year stands at a low ₹-49.46 crores, signalling cash generation issues. Furthermore, the operating profit to interest coverage ratio has dropped to -0.67 times, indicating the company’s earnings are insufficient to cover interest expenses, a red flag for creditworthiness. Over the last five years, operating profit has contracted at an annualised rate of 22.46%, highlighting poor long-term growth prospects.

Despite these negatives, the company maintains a relatively strong debt servicing ability, with a low Debt to EBITDA ratio of 0.63 times. This suggests manageable leverage levels, which may provide some cushion against financial distress. However, the overall quality grade remains weak, contributing to the downgrade.

Valuation: Attractive Yet Risky Discount

From a valuation standpoint, Hazoor Multi Projects Ltd appears attractively priced relative to its peers. The company’s Return on Capital Employed (ROCE) is 7.7%, which, while modest, is supported by an enterprise value to capital employed ratio of just 1.3 times. This valuation discount reflects the market’s cautious stance given the company’s recent performance.

However, this discount comes with significant risk. Over the past year, the stock has delivered a negative return of 43.95%, sharply underperforming the BSE500 index, which gained 6.30% over the same period. Profitability has also declined by 37% year-on-year, reinforcing concerns about the sustainability of the current valuation.

Institutional investors hold a sizeable 24.67% stake in the company, having increased their holdings by 1.56% in the previous quarter. This suggests some confidence from sophisticated market participants, though the overall valuation remains reflective of the company’s challenges.

Financial Trend: Continued Decline and Negative Momentum

The financial trend for Hazoor Multi Projects Ltd remains firmly negative. The company’s quarterly results have shown a consistent decline in key metrics, with operating profit shrinking and net sales falling. The negative trajectory is evident in the operating cash flow, which is at its lowest level in recent years, and the deteriorating profit margins.

Comparatively, the company’s stock return over the last year is -43.95%, starkly contrasting with the Sensex’s positive 8.01% return. Even over shorter periods such as one month and year-to-date, the stock has underperformed the market by wide margins, signalling weak investor sentiment and poor operational momentum.

Longer-term returns, however, tell a different story. Over five and ten years, the stock has delivered extraordinary returns of 10,234.37% and 14,663.38% respectively, far outpacing the Sensex. This historical outperformance is overshadowed by recent financial deterioration, which has prompted a reassessment of the company’s near-term prospects.

Technical Analysis: Shift to Bearish Signals

The downgrade to Strong Sell is largely influenced by a shift in technical indicators, which have turned more bearish. The technical grade changed from mildly bearish to bearish, reflecting increased downside risk in the stock price.

Key technical indicators include:

• MACD: Weekly readings are bearish, while monthly remain mildly bearish, indicating downward momentum in the near term.
• Bollinger Bands: Both weekly and monthly bands signal bearish trends, suggesting increased volatility and potential for further price declines.
• Moving Averages: Daily moving averages are bearish, reinforcing the negative price trend.
• KST (Know Sure Thing): Weekly readings are mildly bullish, but monthly remain mildly bearish, showing mixed but predominantly negative momentum.
• Dow Theory: Weekly trend is mildly bearish, while monthly is mildly bullish, indicating some longer-term uncertainty but near-term weakness.

On 22 Jan 2026, the stock closed at ₹30.49, down 6.13% from the previous close of ₹32.48. The 52-week high and low stand at ₹57.80 and ₹26.80 respectively, with the current price closer to the lower end, reflecting the bearish technical environment.

Market Context and Outlook

Hazoor Multi Projects Ltd operates within the Realty sector, which has faced cyclical pressures and regulatory challenges in recent years. While the company’s long-term historical returns have been exceptional, recent quarters have exposed vulnerabilities in its business model and execution.

The downgrade to Strong Sell by MarketsMOJO reflects a comprehensive analysis of four critical parameters: quality, valuation, financial trend, and technicals. The company’s Mojo Score now stands at 26.0, with a Mojo Grade of Strong Sell, down from Sell previously. The market capitalisation grade remains low at 4, consistent with its micro-cap status.

Investors should weigh the attractive valuation against the ongoing operational and technical headwinds. The stock’s high institutional holding of 24.67% indicates some confidence from informed investors, but the persistent negative earnings and bearish technical signals warrant caution.

In summary, Hazoor Multi Projects Ltd’s downgrade is a reflection of deteriorating financial health, weak earnings momentum, and a shift to bearish technical trends, signalling a challenging environment ahead for shareholders.

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