Majestic Auto Faces Significant Volatility Amid Weak Long-Term Financial Fundamentals

Majestic Auto has experienced significant volatility today, reaching a new 52-week low of Rs. 281.9. The stock has underperformed the sector, with a decline of 7.3% over the last two days, including a gap down opening of 4.87%. Despite this, it managed to outperform the miscellaneous sector by 3.62% today.
The company's long-term fundamentals appear weak, highlighted by a -15.22% compound annual growth rate (CAGR) in operating profits over the past five years. Additionally, Majestic Auto's ability to service its debt is concerning, as indicated by a low EBIT to interest ratio of 1.82. The return on equity stands at a modest 2.89%, reflecting low profitability relative to shareholders' funds.

Recent financial results have also been disappointing, with a net profit after tax of Rs -3.02 crore, marking a drastic decline of 141.3%. The stock's technical indicators suggest a bearish trend, with it trading below all key moving averages. Over the past year, Majestic Auto has seen a return of -7.55%, while its profits have plummeted by 56.2%.