The stock has experienced a continuous decline over the past six trading sessions, resulting in a cumulative return of -13.12% during this period. This downward trend contrasts sharply with the broader market, as the Sensex opened at 85,470.92 and currently trades near 85,450.22, reflecting a gain of approximately 0.31%. Mega-cap stocks have been leading the market rally, while Chemplast Sanmar has underperformed its sector by -2.19% today.
Technically, Chemplast Sanmar is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning indicates sustained selling pressure and a lack of short-term momentum. The stock’s 52-week high stands at Rs.527.55, highlighting the extent of the decline over the past year.
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Over the last year, Chemplast Sanmar’s stock has recorded a return of -34.74%, significantly lagging behind the Sensex’s 10.16% gain during the same period. This underperformance extends over the last three years, with the stock consistently trailing the BSE500 index annually. The company’s financial metrics provide insight into some of the pressures weighing on the stock.
Chemplast Sanmar’s debt servicing capacity is constrained, as reflected by a Debt to EBITDA ratio of 4.30 times. This elevated leverage level suggests a higher burden in managing debt obligations relative to earnings before interest, taxes, depreciation, and amortisation. Additionally, the company’s Return on Equity (ROE) averages 9.03%, indicating modest profitability relative to shareholders’ funds.
Long-term growth indicators also show subdued trends. Net sales have declined at an annual rate of -3.77% over the past five years, while operating profit has contracted sharply by -154.13% in the same timeframe. The latest half-year results reveal cash and cash equivalents at Rs.569.39 crores, the lowest recorded, alongside a debt-to-equity ratio of 0.97 times, the highest in recent periods.
The stock’s risk profile is further highlighted by a significant fall in profits, which have dropped by -70.7% over the past year. This decline in profitability, combined with the stock’s valuation metrics, positions Chemplast Sanmar as a comparatively risky investment within its sector.
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Despite these challenges, the company demonstrates strong management efficiency, with a Return on Capital Employed (ROCE) of 16.72%. This metric suggests effective utilisation of capital resources to generate earnings. Institutional investors hold a significant stake of 38.77%, reflecting confidence from entities with extensive analytical capabilities.
In summary, Chemplast Sanmar’s stock has reached a notable low point at Rs.318.4, reflecting a combination of subdued financial performance, elevated leverage, and persistent underperformance relative to market benchmarks. This decline has occurred even as the broader market and key indices have shown strength, underscoring the divergence in performance within the commodity chemicals sector.
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