Sheela Foam Hits New Low Amid Ongoing Sector Decline and Profit Challenges

Sheela Foam, a midcap player in the consumer durables sector, has experienced significant volatility today, hitting a new 52-week low of Rs. 653. This decline marks a continuation of a downward trend, with the stock falling 5.26% over the past two days. Opening with a gap down of 2.61%, it reached an intraday low of Rs. 653, reflecting a 6.47% drop at its lowest point.
The stock's performance has been in line with the broader consumer durables sector, which has seen a decline of 4.16%. Over the past year, Sheela Foam has underperformed significantly, with a return of -31.11%, compared to the Sensex's -2.26%. The company's operating profit has decreased at an annual rate of 12.43% over the last five years, and it has reported negative results for six consecutive quarters.

Despite these challenges, Sheela Foam maintains a low debt-to-EBITDA ratio of 0.91, indicating a strong ability to service its debt. The stock is currently trading at a discount relative to its peers, with high institutional holdings at 27.59%, suggesting a level of confidence among larger investors.