Hatsun Agro Faces Volatility Amid Declining Profits and Liquidity Concerns

Hatsun Agro Product, a midcap player in the FMCG sector, has experienced significant volatility today, hitting a new 52-week low of Rs. 864.9. This decline marks a notable underperformance, with the stock down 4.9% intraday and trailing the sector by 2.26%. The company's performance over the past year has been challenging, with a return of -12.49%, contrasting sharply with the Sensex's decline of only 2.38%.
Financial metrics reveal a concerning trend, as the company reported a decrease in profit after tax (PAT) of 28.7% in its latest quarterly results, amounting to Rs. 40.94 crore. Additionally, cash and cash equivalents have fallen to Rs. 39.54 crore, indicating potential liquidity issues. The stock is currently trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reflecting a bearish technical outlook.

Despite these challenges, Hatsun Agro has shown healthy long-term growth, with operating profit increasing at an annual rate of 16.57%. The company maintains an attractive valuation with a return on capital employed (ROCE) of 14.6 and a PEG ratio of 3.5, suggesting it is trading at a discount compared to its peers.