The stock has recorded a consecutive fall over the last six trading sessions, resulting in a cumulative return of -13.44% during this period. This recent slide contrasts sharply with the broader market trend, as the Sensex opened higher at 85,470.92 points, gaining 284.45 points or 0.33%, and reached a new 52-week high of 85,461.17 points today. The Sensex's performance is supported by mega-cap stocks trading above their 50-day and 200-day moving averages, signalling a bullish market environment.
In comparison, Plaza Wires is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a persistent weakness in its price momentum. The stock's underperformance today was measured at -1.99%, which is 2.39% below the sector's performance, highlighting its relative lag within the Cables - Electricals industry.
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Over the past year, Plaza Wires has delivered a return of -46.09%, a stark contrast to the Sensex's positive 10.13% return over the same period. The stock's 52-week high was Rs.90.26, underscoring the extent of the decline to its current level. This performance also trails the BSE500 index across multiple time frames, including the last three years, one year, and three months, reflecting a consistent pattern of underperformance.
From a fundamental perspective, the company’s long-term financial metrics reveal challenges. Operating profits have shown a compound annual growth rate (CAGR) of -20.36% over the last five years, indicating contraction in core earnings. The company’s ability to service debt is constrained, with an average EBIT to interest ratio of 1.97, suggesting limited coverage of interest expenses by operating earnings.
Profitability metrics also point to subdued returns, with an average Return on Equity (ROE) of 2.29%, which is relatively low for the sector. The Return on Capital Employed (ROCE) stands at 4.6%, which, while modest, is accompanied by an enterprise value to capital employed ratio of 1.4, indicating an attractive valuation relative to capital utilisation.
Despite the stock’s price decline, Plaza Wires has reported positive results in the last three consecutive quarters. The company’s Profit After Tax (PAT) for the nine-month period stands at Rs.3.43 crore, while quarterly net sales reached a peak of Rs.74.71 crore. However, profits over the past year have contracted by 22%, aligning with the stock’s downward trend.
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Majority ownership of Plaza Wires remains with promoters, maintaining a stable shareholding structure. The stock’s recent performance and valuation metrics reflect a complex scenario where positive quarterly results coexist with longer-term financial pressures and market scepticism.
In summary, Plaza Wires’ fall to Rs.39.07 represents a significant technical milestone, coinciding with a period of sustained price weakness and fundamental headwinds. While the broader market and sector indices have shown resilience, the stock’s position below all major moving averages and its relative underperformance highlight ongoing challenges within the company’s financial and market profile.
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