Nexus Select Trust Faces Profit Decline and Low ROCE Amid Stake Reduction

Nexus Select Trust, a large-cap player in the construction and real estate sector, has recently undergone an evaluation adjustment reflecting its current market position. The company reported flat financial performance for the second quarter of FY24-25, with a notable decline in profit after tax, which stood at Rs 110.24 crore, marking a decrease of 31.6%. Additionally, the operating cash flow for the year reached its lowest point at Rs -33.37 crore.
The company's return on capital employed (ROCE) remains low at 4.35%, indicating challenges in generating profitability relative to its total capital. Furthermore, the debt-equity ratio has reached a high of 0.30 times, suggesting a significant reliance on debt financing. Promoter confidence appears to be waning, as there has been a 20.83% reduction in their stake over the previous quarter, now holding 22.3% of the company.

Despite these challenges, Nexus Select Trust has shown healthy long-term growth in net sales and operating profit. However, technical indicators suggest a sideways trend, reflecting a lack of clear price momentum.

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