Why is Haz.Multi Proj. falling/rising?

Recent Price Movement and Market Comparison

Hazoor Multi Projects has experienced a notable dip in its share price, falling by 1.86% on 19 December to ₹35.85. This decline is part of a broader short-term downtrend, with the stock losing 2.42% over the past week, significantly underperforming the Sensex’s modest 0.40% decline in the same period. The stock has also been on a three-day losing streak, shedding 6.05% in that timeframe, indicating sustained selling pressure.

Despite this recent weakness, the stock has delivered a strong long-term performance, with a remarkable 5-year return exceeding 14,000%, far outpacing the Sensex’s 80.85% gain. Over three years, the stock has also outperformed the benchmark with a 353.40% return compared to the Sensex’s 37.41%. However, the short-term and year-to-date figures tell a different story, with the stock down over 30% in the last year and year-to-date, while the Sensex has gained 7.21% and 8.69% respectively.

Investor Participation and Liquidity Concerns

Investor interest appears to be waning, as evidenced by a sharp 58.26% drop in delivery volume on 18 December compared to the five-day average. This decline in participation suggests that fewer investors are willing to hold the stock amid its recent volatility. Although liquidity remains adequate for moderate trade sizes, the falling volume could exacerbate price declines if selling intensifies.

Financial Performance and Valuation Metrics

Hazoor Multi Projects demonstrates a strong capacity to service its debt, with a low Debt to EBITDA ratio of 0.63 times, which is a positive indicator of financial stability. The company’s return on capital employed (ROCE) stands at 7.7%, and it maintains an attractive valuation with an enterprise value to capital employed ratio of 1.4. These metrics suggest that the stock is trading at a discount relative to its peers’ historical valuations, potentially offering value to investors.

However, these positives are overshadowed by deteriorating profitability. Over the past year, the company’s profits have declined by 37%, and net sales have fallen by 15.22%. The company has reported negative results for eight consecutive quarters, with the latest quarterly profit after tax (PAT) plunging to a loss of ₹9.93 crores, a dramatic 189.6% decline compared to the previous four-quarter average. Operating cash flow has also hit a low of ₹-49.46 crores, and the operating profit to interest coverage ratio has dropped to -0.67 times, signalling significant operational and financial stress.

Long-Term Growth Challenges

Hazoor Multi Projects faces persistent challenges in sustaining growth. Its operating profit has contracted at an annualised rate of 22.46% over the last five years, reflecting poor long-term growth prospects. This weak performance is mirrored in the stock’s underperformance relative to the broader market indices. While the BSE500 index has generated a 3.86% return over the past year, Hazoor Multi Projects has delivered a negative return of 30.55%, underscoring its struggles to keep pace with market gains.

Institutional investors hold a significant 24.67% stake in the company, and their holdings have increased by 1.56% over the previous quarter. This suggests that some sophisticated investors may still see value or potential in the stock despite recent setbacks. Nevertheless, the overall market sentiment remains cautious given the company’s recent financial results and declining investor participation.

Conclusion: Why the Stock is Falling

The decline in Hazoor Multi Projects’ share price on 19 December and over recent weeks is primarily driven by disappointing financial results and weakening operational metrics. The company’s sustained losses, falling sales, and negative cash flows have eroded investor confidence, leading to reduced participation and selling pressure. Despite a strong long-term track record and attractive valuation metrics, the persistent negative quarterly results and poor growth outlook have weighed heavily on the stock’s performance.

Investors appear to be cautious, reflected in the stock’s underperformance relative to the Sensex and sector peers. While institutional investors maintain a sizeable stake, the broader market sentiment remains subdued due to the company’s ongoing challenges in reversing its profitability decline. Until there is a clear turnaround in financial performance and growth prospects, the stock is likely to face continued pressure.

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