Nexus Select Trust Faces Evaluation Adjustment Amid Declining Profitability and Cash Flow Concerns

Nexus Select Trust has recently undergone an adjustment in evaluation, reflecting the current dynamics within the construction and real estate sector. This revision comes amid a backdrop of key financial metrics that have drawn attention from market observers.
The company's Return on Capital Employed (ROCE) stands at 4.35%, indicating challenges in management efficiency and profitability relative to total capital. Furthermore, the Profit After Tax (PAT) for the latest quarter was reported at Rs 110.24 crore, which shows a notable decline compared to previous periods. Operating cash flow has also reached a concerning level, recorded at Rs -33.37 crore, while the debt-equity ratio is positioned at 0.30 times, suggesting a relatively high leverage situation.

Despite offering a dividend yield of 5.9%, the stock's valuation metrics, particularly the enterprise value to capital employed ratio of 1.3, suggest that it may be perceived as expensive in the current market context. Over the past year, Nexus Select Trust has generated a modest return of 2.08%, with profits showing little movement. The technical trend appears to be sideways, indicating a lack of decisive price momentum, which adds complexity to the overall outlook for the stock.

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