Why is Hathway Bhawani Cabletel & Datacom Ltd falling/rising?

Persistent Underperformance Against Benchmarks

The stock has consistently lagged behind the broader market indices over multiple time horizons. Over the past week, Hathway Bhawani's shares fell by 6.17%, more than double the Sensex's decline of 2.55%. This trend extends to the monthly and year-to-date periods, with the stock down 5.16% and 6.37% respectively, compared to the Sensex's more modest declines of 1.29% and 1.93%. The disparity becomes even more pronounced over longer durations; the stock has lost 26.30% in the last year while the Sensex gained 7.67%. Over three and five years, the stock's returns stand at -32.33% and -41.20%, in stark contrast to the Sensex's robust gains of 37.58% and 71.32% respectively. This persistent underperformance signals investor scepticism and a lack of confidence in the company's growth prospects.

Technical Indicators and Trading Activity

On the technical front, Hathway Bhawani is trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning typically indicates a bearish trend and suggests that the stock is struggling to gain upward momentum. Additionally, the share price is hovering just 1.74% above its 52-week low of ₹13, underscoring the stock's vulnerability and weak price support levels. Despite this, investor participation has increased, with delivery volume on 08 Jan rising by 119.66% compared to the five-day average. While this heightened activity could indicate interest from some investors, it has not translated into price strength, as the stock continues to decline and underperform its sector by 2.66% on the day.

Fundamental Weaknesses Weighing on the Stock

Hathway Bhawani's long-term fundamentals reveal significant weaknesses that have contributed to its declining share price. The company has experienced a negative compound annual growth rate (CAGR) of -54.54% in operating profits over the past five years, indicating deteriorating core business performance. Furthermore, its ability to service debt is concerning, with an average EBIT to interest ratio of just 0.32, reflecting insufficient earnings to comfortably cover interest expenses. This financial strain undermines investor confidence and raises questions about the company's sustainability.

Despite reporting flat results in September 2025, the company maintains a return on equity (ROE) of 9%, which is modest but not compelling enough to justify its valuation. The stock trades at a price-to-book value of 6.1, which is considered very expensive relative to its fundamentals. Although this valuation is discounted compared to peers' historical averages, it remains high given the company's weak profit growth and operational challenges. Interestingly, while profits have risen by 30% over the past year, the stock has still generated a negative return of 26.30%, resulting in a low price/earnings to growth (PEG) ratio of 0.3. This discrepancy suggests that the market is cautious about the sustainability of profit growth and the company's future prospects.

Consistent Negative Sentiment and Market Position

The stock's consistent underperformance against the BSE500 index over the last three years further highlights the negative sentiment surrounding Hathway Bhawani. Investors have witnessed a steady erosion of value, with the company failing to keep pace with broader market gains. The majority shareholding by promoters has not translated into positive momentum, as the stock continues to languish near its 52-week lows. This persistent weakness is compounded by the lack of significant positive catalysts or improvements in operational metrics.

Conclusion: Why Hathway Bhawani Shares Are Falling

The decline in Hathway Bhawani Cabletel & Datacom Ltd's share price as of 09-Jan is primarily driven by its weak long-term fundamentals, poor debt servicing capacity, and consistent underperformance relative to market benchmarks. The stock's technical indicators reinforce a bearish outlook, trading below all key moving averages and close to its 52-week low. Despite a recent rise in investor participation, the lack of positive earnings momentum and expensive valuation metrics have kept the stock under pressure. Investors appear wary of the company's ability to reverse its downward trajectory, reflected in the sustained negative returns over multiple time frames. Until there is a marked improvement in operational performance and financial health, the stock is likely to remain under selling pressure.

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