Super Tannery Faces Evaluation Adjustment Amid Mixed Financial Performance and Debt Concerns

Super Tannery, a microcap player in the leather industry, has recently undergone an adjustment in evaluation, reflecting the company's current market dynamics and financial metrics. The latest assessment highlights a mixed performance landscape, with the company reporting positive financial results for the quarter ending Q3 FY24-25. Notably, the net sales for the half-year period reached Rs 151.53 crore, marking a growth of 28.61%, while the profit after tax for the nine-month period stood at Rs 4.79 crore, reflecting a growth rate of 30.52%.
Despite these positive indicators, the evaluation adjustment underscores concerns regarding the company's long-term fundamental strength. The average Return on Capital Employed (ROCE) is noted at 6.30%, which raises questions about the company's ability to generate sustainable returns. Additionally, the high Debt to EBITDA ratio of 4.20 times suggests challenges in servicing debt obligations.

The stock has also faced technical headwinds, with recent trends indicating a bearish range. Over the past year, Super Tannery has underperformed the broader market, generating negative returns of -11.70%, contrasting with the BSE 500's returns of 1.91%.

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