Recent Price Movement and Market Context
Hathway Cable’s shares have been under pressure recently, hitting a new 52-week low of ₹11.56 on the same day. The stock has declined by 3.7% over the last two days, signalling a continuation of negative momentum. This downward trend is further underscored by the stock trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating sustained bearish sentiment among traders and investors.
In comparison to the broader market, Hathway Cable has significantly underperformed. Over the past week, the stock declined by 3.84%, while the Sensex remained almost flat with a marginal 0.06% gain. The divergence is more pronounced over longer periods, with the stock falling 7.40% in the last month against a 0.82% rise in the Sensex. Year-to-date, Hathway Cable has lost 18.88%, whereas the benchmark index has gained 8.65%. Over one year, the stock’s return stands at a negative 29.70%, contrasting sharply with the Sensex’s 7.31% gain. This underperformance extends to three and five-year horizons, where the stock has declined by 20.50% and 57.61% respectively, while the Sensex has surged by 36.34% and 90.69%.
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Financial Performance and Valuation Concerns
Hathway Cable’s financial metrics reveal several areas of concern that help explain the stock’s decline. The company’s return on equity (ROE) is low, averaging 2.84%, which indicates limited profitability relative to shareholders’ funds. This poor management efficiency is reflected in the company’s operating profit, which has contracted at an annualised rate of 43.82% over the past five years. Quarterly profit after tax (PAT) has also fallen sharply by 29.1% to ₹18.25 crores, while profit before tax excluding other income declined by 19.59% to ₹7.43 crores.
Moreover, the company’s debtor turnover ratio stands at a low 0.48 times for the half-year period, signalling inefficiencies in collecting receivables. Despite its size, domestic mutual funds hold no stake in Hathway Cable, which may reflect a lack of confidence in the company’s prospects or valuation. The stock’s price-to-book value ratio of 0.5 suggests it is trading at a discount relative to peers, but this valuation discount appears to be driven by the company’s deteriorating fundamentals rather than an undervaluation opportunity.
Investor participation has also waned, with delivery volumes falling by 16.86% against the five-day average as of 21 November, indicating reduced buying interest. Liquidity remains adequate for small trade sizes, but the declining volumes and price weakness highlight a cautious market stance.
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Conclusion: Why Hathway Cable Shares Are Falling
The decline in Hathway Cable’s share price as of 24 November is primarily attributable to its weak financial performance, poor profitability metrics, and subdued investor interest. The company’s inability to generate robust returns on equity, coupled with shrinking operating profits and falling quarterly earnings, has eroded confidence among market participants. This is compounded by the stock’s consistent underperformance relative to the Sensex and sector peers over multiple time frames, signalling structural challenges rather than short-term volatility.
Additionally, the absence of domestic mutual fund holdings suggests a lack of institutional endorsement, which often weighs heavily on small and mid-cap stocks. The recent fall to a new 52-week low and trading below all major moving averages further reinforce the bearish technical outlook. While the stock’s valuation appears discounted, this is reflective of the company’s deteriorating fundamentals rather than a bargain opportunity.
Investors should remain cautious given the company’s poor long-term growth trajectory, declining profitability, and weak market participation. Until there is a clear turnaround in operational performance and investor sentiment, Hathway Cable’s shares are likely to remain under pressure.
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