Shangar Decor Faces Significant Volatility Amidst Declining Profitability and High Debt Concerns

Shangar Decor, a microcap player in the diversified commercial services industry, has experienced significant volatility, hitting a new 52-week low of Rs. 0.41 today. The stock has underperformed its sector by 1.76% and has seen a consecutive decline over the past three days, resulting in a total drop of 10.64% during this period.
In terms of moving averages, Shangar Decor is currently 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 71.89%, starkly contrasting with the Sensex, which has only seen a marginal decline of 0.03%.

Financially, the company is grappling with operating losses and a high debt-to-EBITDA ratio of 4.05 times, raising concerns about its ability to service debt. Recent quarterly results reflect a sharp decline in profitability, with a profit before tax of Rs. -2.17 crore, down 338.46%, and a net profit after tax of Rs. -1.59 crore, down 352.4%. Despite these challenges, the company boasts a return on capital employed (ROCE) of 12.6 and a favorable enterprise value to capital employed ratio of 1.7, suggesting some attractive valuation metrics compared to its peers.