Indo Rama Synthetics Faces Market Volatility Amid Mixed Financial Performance

Apr 07 2025 10:55 AM IST
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Indo Rama Synthetics (India) has faced notable volatility, hitting a 52-week low and experiencing a significant decline over the past two days. Despite reporting record net sales and a peak operating profit ratio, the company's long-term fundamentals remain weak, with poor return on capital and debt servicing challenges.
Indo Rama Synthetics Faces Market Volatility Amid Mixed Financial Performance
Indo Rama Synthetics (India) has experienced significant volatility today, reaching a new 52-week low of Rs. 29.1. The stock opened with a notable gap down, reflecting a loss of 17.21% at the start of trading. Over the past two days, Indo Rama has seen a decline of 9.75%, underperforming the textile sector, which has fallen by 5.53%.
Despite these challenges, the company reported its highest net sales in the last quarter at Rs. 1,165.63 crore, alongside a peak operating profit to interest ratio of 1.60 times. However, the long-term fundamentals remain weak, with a return on capital employed (ROCE) of just 9.34% and a concerning EBIT to interest ratio of 0.98, indicating difficulties in servicing debt. Indo Rama's one-year performance stands at -27.65%, significantly lagging behind the Sensex, which has only decreased by 2.07% over the same period. The stock is currently trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, reflecting a bearish technical trend. Despite a small stake held by domestic mutual funds, the company’s recent positive results after a series of negative quarters may provide some context for its current market position.
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