Hathway Cable & Datacom Declines 4.72%: Technical Weakness and Financial Struggles Weigh

5 January: Upgrade to Sell on Technical and Valuation Improvements

Hathway Cable & Datacom Ltd began the week with a modest gain of 1.76%, closing at ₹12.70, following an upgrade from Strong Sell to Sell by MarketsMOJO. This upgrade was driven by a shift in technical indicators from bearish to mildly bearish and a reclassification of valuation from attractive to fair. The stock traded in a narrow range between ₹12.40 and ₹12.71, remaining well below its 52-week high of ₹17.95.

Technical signals were mixed: while the weekly RSI turned bullish indicating short-term buying interest, the MACD remained bearish on weekly and monthly charts. On-balance volume showed mild accumulation, suggesting some investor interest despite the overall weak momentum. The valuation metrics showed a moderate PE ratio of 22.87 and a price-to-book ratio of 0.51, reflecting a fair but cautious valuation stance.

6 January: Mixed Technical Signals Amid Mild Momentum Shift

The stock edged down slightly by 0.08% to ₹12.48 on low volume, as technical momentum showed signs of fragility. The mildly bearish trend persisted, with the MACD and KST indicators remaining bearish, while the weekly RSI and OBV hinted at some short-term bullish tendencies. The Dow Theory suggested a mildly bullish weekly trend, but the monthly outlook remained neutral.

Despite these mixed signals, Hathway Cable continued to lag the Sensex, which declined by 0.19% that day. The constrained trading range and subdued volatility reflected investor caution amid ongoing sector challenges and competitive pressures in the media and entertainment industry.

7 January: Bearish Momentum Intensifies Amid Technical Downturn

The stock declined 0.56% to ₹12.41 as technical indicators deteriorated sharply. The technical trend shifted back to outright bearish, with daily moving averages turning decisively negative and MACD firmly bearish on weekly and monthly charts. The KST oscillator confirmed negative momentum, while the RSI remained neutral, indicating no immediate oversold conditions.

Bollinger Bands showed the price hugging the lower band, signalling sustained selling pressure. On-balance volume was mixed, with no clear trend on the weekly chart but mild accumulation on the monthly scale. The Dow Theory suggested a mildly bearish weekly trend, reinforcing the negative outlook.

Relative to the Sensex, which rose marginally by 0.03%, Hathway Cable underperformed, highlighting the stock’s vulnerability amid broader market resilience. The company’s Mojo Score remained at 31.0, reflecting a Sell rating but signalling no immediate recovery.

8 January: Downgrade to Strong Sell Amid Weak Technicals and Financials

On 8 January, the stock suffered its largest daily decline of the week, falling 2.01% to ₹12.16. This followed a downgrade from Sell to Strong Sell by MarketsMOJO, prompted by worsening technical indicators and disappointing financial results. The technical grade shifted from mildly bearish to outright bearish, with MACD, KST, and moving averages all signalling intensified downside risk.

Despite an attractive valuation with a price-to-book ratio of 0.50 and a moderate PE of 22.36, the company’s negative enterprise value multiples and low return on equity of 2.22% underscored operational challenges. Quarterly financials revealed a 29.1% drop in profit after tax and a 19.59% decline in profit before tax excluding other income, highlighting deteriorating profitability.

The stock traded closer to its 52-week low of ₹11.56, reflecting investor concerns about the company’s growth prospects and sector headwinds. Domestic mutual funds hold no stake, indicating limited institutional support.

9 January: Week Closes with Continued Weakness

The week ended with a further decline of 0.49% to ₹12.10, as the stock continued to face selling pressure amid a weak Sensex environment, which fell 0.89% that day. Volume increased to 242,500 shares, indicating sustained investor activity but no reversal of the downtrend.

The technical outlook remains bearish with no clear signs of recovery. The stock’s performance for the week was significantly weaker than the Sensex, which declined 2.62% compared to Hathway Cable’s 4.72% fall, underscoring the stock’s relative vulnerability.

Key Takeaways

Positive Signals: The initial upgrade to Sell on 5 January reflected some technical stabilisation and a fair valuation, with mild accumulation indicated by on-balance volume and a bullish weekly RSI. The company’s low debt-to-equity ratio suggests limited financial risk from leverage.

Cautionary Signals: Despite early optimism, the stock faced persistent bearish momentum, with MACD, KST, and moving averages signalling downward pressure. The downgrade to Strong Sell on 8 January highlighted deteriorating financial performance, including a 29.1% drop in PAT and a 19.59% decline in PBT less other income. The stock’s valuation, while attractive on price-to-book, masks underlying operational weaknesses and poor profitability metrics such as a low ROE of 2.22%. Long-term returns remain deeply negative compared to the Sensex, reflecting structural challenges.

Conclusion

Hathway Cable & Datacom Ltd’s week was characterised by a struggle to maintain technical support amid worsening financial fundamentals and sector headwinds. The stock’s 4.72% weekly decline, underperforming the Sensex by 2.10%, reflects investor caution and the absence of a clear turnaround catalyst. While some short-term technical indicators suggested potential for consolidation, the dominant trend remains bearish, reinforced by a downgrade to Strong Sell and disappointing quarterly results.

Investors should remain vigilant, monitoring technical levels and financial updates closely. The stock’s attractive valuation does not currently compensate for its operational challenges and weak profitability. Until there is evidence of sustained improvement in earnings and market sentiment, the outlook remains cautious.

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