Hazoor Multi Projects Ltd Upgraded to Sell on Technical Improvement Despite Weak Financials

Quality Assessment: Persistent Financial Weakness

Hazoor Multi Projects continues to grapple with significant financial headwinds. The company reported a very negative financial performance in the second quarter of FY25-26, with net sales declining by 15.22% year-on-year. Operating profit has contracted at an annualised rate of 22.46% over the past five years, signalling sustained operational difficulties. The latest quarterly profit after tax (PAT) stood at a loss of ₹9.93 crores, a steep fall of 189.6% compared to the previous four-quarter average.

Operating cash flow has also deteriorated, reaching a low of ₹-49.46 crores, while the operating profit to interest coverage ratio has plunged to -0.67 times, indicating the company’s struggle to cover interest expenses from its core earnings. These figures underscore the ongoing financial strain and justify the company’s low Mojo Grade of Sell, albeit an improvement from Strong Sell.

Valuation: Attractive Despite Weakness

Despite the financial setbacks, Hazoor Multi Projects presents an attractive valuation profile. The company’s return on capital employed (ROCE) stands at 7.7%, which, while modest, is supported by a low enterprise value to capital employed ratio of 1.5 times. This suggests the stock is trading at a discount relative to its peers’ historical valuations, offering potential value for investors willing to look beyond short-term earnings volatility.

Moreover, the company’s debt servicing capability remains strong, with a low debt to EBITDA ratio of 0.63 times, reducing financial risk. Institutional investors hold a significant 22.92% stake, reflecting confidence from sophisticated market participants who typically conduct thorough fundamental analysis.

Financial Trend: Continued Underperformance

Hazoor Multi Projects has underperformed the broader market over the last year. While the BSE500 index generated a 9.00% return in the same period, the stock declined by 30.78%. This negative trend is compounded by a 37% fall in profits over the past year. The company has reported losses for eight consecutive quarters, highlighting a persistent downward trajectory in earnings and cash flows.

However, the longer-term performance tells a different story. Over five and ten years, the stock has delivered extraordinary returns of 12,068.05% and 13,898.64% respectively, far outpacing the Sensex’s 63.78% and 249.97% gains. This stark contrast suggests that while short-term fundamentals are weak, the company has historically created significant shareholder value.

Technical Analysis: Shift to Mildly Bearish Signals

The primary catalyst for the upgrade from Strong Sell to Sell is the improvement in technical indicators. The technical trend has shifted from bearish to mildly bearish, reflecting a subtle but meaningful change in market momentum. Key weekly indicators such as MACD and KST have turned mildly bullish, while Bollinger Bands on the weekly chart also signal bullish tendencies.

Conversely, monthly indicators remain mildly bearish, with MACD, KST, and Bollinger Bands showing caution. The daily moving averages continue to suggest a mildly bearish stance, and RSI readings on both weekly and monthly charts do not provide clear signals. Overall, the technical picture is mixed but trending towards a less negative outlook, supporting the rating upgrade.

On 10 February 2026, the stock closed at ₹35.90, up 1.99% from the previous close of ₹35.20. The day’s trading range was ₹34.03 to ₹36.00, with the 52-week high at ₹53.60 and low at ₹26.80, indicating the stock is trading closer to its lower range but showing signs of recovery.

Market Context and Outlook

Hazoor Multi Projects operates within the realty sector, which has faced cyclical pressures and regulatory challenges in recent years. The company’s market capitalisation grade remains modest at 4, reflecting its mid-tier size within the industry. Despite recent underperformance, the stock’s long-term track record and current valuation discount may attract value-oriented investors.

Institutional holdings at 22.92% provide a degree of stability and suggest that knowledgeable investors see potential in the company’s recovery prospects. However, the persistent negative earnings trend and weak operating cash flows warrant caution.

Investors should weigh the improved technical signals against the ongoing financial difficulties. The upgrade to a Sell rating from Strong Sell signals a less pessimistic view but does not yet indicate a full recovery or a buy recommendation. The Mojo Score of 31.0 and the Sell grade reflect this balanced stance.

Conclusion

Hazoor Multi Projects Ltd’s recent rating upgrade to Sell is primarily driven by a shift in technical indicators from bearish to mildly bearish, signalling a potential stabilisation in market sentiment. However, the company’s financial performance remains very weak, with declining sales, losses, and poor cash flow metrics continuing to weigh on fundamentals.

The valuation remains attractive relative to peers, supported by a low debt burden and reasonable ROCE, which may offer some cushion for investors. Long-term returns have been exceptional, but recent underperformance and negative earnings trends suggest caution.

Overall, the rating change reflects a nuanced view that acknowledges technical improvements while recognising persistent financial challenges. Investors should monitor upcoming quarterly results and sector developments closely before considering a position in Hazoor Multi Projects.

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