Sadhana Nitro Chem Faces Severe Volatility Amid Weak Fundamentals and High Debt Concerns

Sadhana Nitro Chem, a microcap player in the commodity chemicals industry, has experienced significant volatility, hitting a new 52-week low of Rs. 7.03 today. The stock has underperformed its sector by 5.09%, marking a continuous decline over the past 21 days, resulting in a staggering 65.62% drop in returns during this period.
In terms of moving averages, Sadhana Nitro Chem is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a bearish trend. Over the past year, the stock has plummeted by 86.93%, contrasting sharply with the Sensex, which has gained 4.36% in the same timeframe.

Financially, the company has shown weak long-term fundamentals, with a Return on Capital Employed (ROCE) of just 5.37% and a high Debt to EBITDA ratio of 5.35 times, raising concerns about its ability to service debt. Additionally, 52.67% of promoter shares are pledged, which has increased by nearly 29% in the last quarter, potentially adding further pressure on the stock. Despite these challenges, Sadhana Nitro Chem reported a notable 58.91% growth in net profit for the quarter ending March 25, alongside a strong operating profit to interest ratio of 3.08 times.