Shangar Decor Reports 1850% Net Profit Growth Amid Operational Efficiency Gains

Shangar Decor, a microcap player in the miscellaneous industry, has recently reported impressive financial metrics, showcasing a remarkable net profit growth of 1850% for the quarter ending September 2024. This surge in profitability is complemented by a significant increase in net sales, which reached Rs 5.29 crore, reflecting a growth rate of 139.37% in the first half of the fiscal year.
The company's return on capital employed (ROCE) stands at 12.41%, marking its highest level to date, while the debtors turnover ratio has also improved, now at 1.67 times. Despite these positive indicators, Shangar Decor faces challenges with long-term fundamental strength, evidenced by an average ROCE of 5.26% and a high debt to EBITDA ratio of 4.05 times, indicating potential difficulties in servicing its debt.

Over the past year, the stock has generated a modest return of 0.48%, significantly lagging behind the broader market, which saw returns of 16.93% in the same period. While the stock is currently trading at a discount compared to its historical valuations, it remains in a mildly bullish technical range, supported by favorable MACD and KST indicators.