Stock Price Movement and Market Context
The stock price of Hilton Metal Forging Ltd declined by 3.35% today, underperforming its sector by 2.61%. This drop follows two consecutive days of gains, signalling a reversal in short-term momentum. The share price now trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a sustained bearish trend.
In contrast, the broader market has shown resilience. The Sensex opened lower at 85,640.05, down 121.96 points (-0.14%), and is currently trading at 85,661.12 (-0.12%). The index remains close to its 52-week high of 86,159.02, just 0.58% away, supported by bullish moving averages where the 50-day moving average is above the 200-day moving average. Small-cap stocks are leading the market rally, with the BSE Small Cap index gaining 0.1% today.
Long-Term Performance and Valuation Metrics
Hilton Metal Forging Ltd’s one-year performance has been notably weak, with the stock losing 66.00% of its value compared to the Sensex’s gain of 8.08% over the same period. The stock’s 52-week high was Rs.108.86, highlighting the extent of the decline. Over the last three years, the company has consistently underperformed the BSE500 index, reflecting challenges in maintaining growth and shareholder value.
The company’s fundamental strength remains subdued, with a low average Return on Capital Employed (ROCE) of 5.85%, which is below industry standards. Additionally, the firm’s ability to service debt is constrained, as evidenced by a high Debt to EBITDA ratio of 4.56 times, indicating elevated leverage and potential financial strain.
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Promoter Shareholding and Pledge Impact
One notable concern is the high proportion of promoter shares pledged, which currently stands at 45.61%. This level of pledged shares has increased by 23.43% over the last quarter, potentially adding downward pressure on the stock price during market declines. Elevated pledged holdings can limit promoter flexibility and may influence market sentiment negatively.
Recent Financial Results and Operational Highlights
Despite the stock’s price weakness, Hilton Metal Forging Ltd reported a significant growth in net profit of 1060% in the September 2025 quarter, reflecting a very positive earnings surprise. Net sales for the latest six months reached Rs.109.69 crores, growing at a robust rate of 41.03%. The company’s operating profit to interest coverage ratio improved to 2.24 times, the highest recorded, while PBDIT for the quarter stood at Rs.3.40 crores, also a peak figure.
These results suggest operational improvements and enhanced profitability metrics in the near term, although these have yet to translate into sustained stock price recovery.
Valuation and Comparative Analysis
Hilton Metal Forging Ltd currently trades at a very attractive valuation, with a Return on Capital Employed (ROCE) of 4.5 and an enterprise value to capital employed ratio of 1. This valuation is discounted relative to its peers’ historical averages, indicating that the market is pricing in considerable risk or uncertainty. The company’s Price/Earnings to Growth (PEG) ratio stands at 0.5, reflecting low price multiples relative to earnings growth, which may appeal to value-focused investors.
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Summary of Key Metrics
To summarise, Hilton Metal Forging Ltd’s stock has declined sharply to Rs.32.6, its lowest level in 52 weeks, reflecting a 66.00% loss over the past year. The company’s financial profile shows mixed signals: while profitability and sales growth have improved recently, long-term fundamental strength remains weak, and leverage levels are elevated. The increase in pledged promoter shares adds an additional layer of caution for market participants.
Meanwhile, the broader market environment remains relatively positive, with the Sensex near its 52-week high and small caps leading gains. Hilton Metal Forging Ltd’s underperformance relative to these benchmarks highlights the challenges it faces within the Castings & Forgings sector.
Mojo Score and Market Ratings
The company’s Mojo Score currently stands at 43.0, with a Mojo Grade of Sell, an improvement from a previous Strong Sell rating as of 21 July 2025. The Market Cap Grade is rated 4, indicating a mid-tier market capitalisation within its sector. These ratings reflect the cautious stance adopted by market analysts based on the company’s financial and market performance.
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