The stock has been on a downward trajectory for the past four trading sessions, resulting in a cumulative return loss of 16.14% over this period. Today's closing price of Rs.24 represents both a fresh 52-week and all-time low for the company, underscoring the extent of the recent price erosion.
In comparison, the broader Educational Institutions sector has recorded a gain of 5.88% during the same timeframe, highlighting a divergence in performance. Humming Bird Education's underperformance is further emphasised by its trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
On the market front, the Sensex opened positively with a gain of 91.42 points but later retreated by 369.35 points, closing at 84,673.02, down 0.33%. Despite this dip, the Sensex remains close to its 52-week high of 85,290.06, trading just 0.73% below that peak. The index continues to trade above its 50-day moving average, which itself is positioned above the 200-day moving average, indicating a generally bullish trend in the broader market.
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Examining the one-year performance, Humming Bird Education has recorded a negative return of 75.61%, a stark contrast to the Sensex's positive return of 9.48% over the same period. The stock's 52-week high was Rs.103.55, indicating a substantial decline from its peak value.
Financial metrics reveal a subdued growth pattern for the company. Over the last five years, the compound annual growth rate (CAGR) for operating profits stands at -0.61%, reflecting a contraction in core earnings. The company's capacity to service its debt appears limited, with an average EBIT to interest ratio of -0.25, suggesting that earnings before interest and tax have not been sufficient to cover interest expenses.
Profitability indicators also point to modest returns. The average return on equity (ROE) is 5.99%, indicating relatively low profitability generated from shareholders' funds. Despite this, the company reported a 50% rise in profits over the past year, which contrasts with the stock's negative price performance during the same period. The price-to-earnings-to-growth (PEG) ratio is recorded at 0.1, while the price-to-book value ratio stands at 7.6, with an ROE of 18.1 reflecting a fair valuation metric.
In the most recent quarterly results for September 2021, the company posted flat results, showing no significant change in financial performance compared to previous periods. This stagnation may contribute to the cautious sentiment reflected in the stock price movement.
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Overall, Humming Bird Education's stock performance reflects a combination of subdued financial growth, limited debt servicing ability, and low profitability metrics. The stock's recent decline to Rs.24, its lowest level in 52 weeks, comes amid a broader market environment where the Sensex and sector indices have shown resilience. The divergence between the stock and its sector peers highlights the challenges faced by the company within the Other Consumer Services industry.
Investors analysing Humming Bird Education should consider the detailed financial data and market context to understand the factors influencing the stock's current valuation and price movement.
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