Recent Price Performance and Market Context
HMA Agro Industries has experienced a notable decline in its share price over the past week, dropping by 5.85%, significantly underperforming the Sensex, which remained nearly flat with a marginal 0.10% gain. Over the last month, the stock has also fallen by 2.62%, while the Sensex gained 0.45%. Year-to-date, the stock’s performance is particularly weak, down 24.59%, contrasting sharply with the Sensex’s 8.25% rise. Over the last year, the stock has declined by 29.75%, whereas the Sensex has appreciated by 5.59%. This persistent underperformance highlights investor concerns about the company’s prospects relative to the broader market.
On the day in question, the stock underperformed its sector by 2.05%, continuing a two-day losing streak that has resulted in a cumulative 5.2% decline. The stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish technical trend. Additionally, investor participation appears to be waning, with delivery volumes on 24 Nov falling by nearly 28% compared to the five-day average, suggesting reduced buying interest.
While markets shift, this one's charging ahead! This Micro Cap from Aquaculture shows the strongest momentum signals in current conditions. Don't miss out on this ride!
- - Strongest current momentum
- - Market-cycle outperformer
- - Aquaculture sector strength
Financial Performance: Bright Spots Amid Challenges
Despite the recent share price weakness, HMA Agro Industries reported very positive quarterly results in September 2025. The company achieved its highest-ever net sales of ₹2,155.34 crores and recorded a PBDIT of ₹95.46 crores, also a record high. The operating profit margin improved to 4.43%, the highest level seen for the company. Furthermore, net profit surged dramatically by 14,865%, reflecting a significant turnaround in profitability for the quarter.
The company’s return on capital employed (ROCE) stands at 7.9%, which is considered attractive, especially given its enterprise value to capital employed ratio of 1.5. This valuation metric indicates that the stock is trading at a discount relative to its peers’ historical averages. Additionally, the company’s profits have grown by 23.7% over the past year, despite the stock’s negative price returns. The PEG ratio of 0.5 suggests that the stock may be undervalued relative to its earnings growth potential.
Structural Weaknesses and Investor Concerns
However, these positive indicators are tempered by several fundamental weaknesses that continue to weigh on investor sentiment. Over the last five years, the company’s operating profits have declined at a compound annual growth rate (CAGR) of -11.50%, signalling long-term operational challenges. The company also faces a high debt burden, with a Debt to EBITDA ratio of 3.53 times, raising concerns about its ability to service debt efficiently.
Moreover, the average return on capital employed over time is only 7.28%, indicating relatively low profitability per unit of capital invested. This modest return, combined with the company’s weak long-term profit growth, undermines confidence in its sustainable earnings power.
Another notable factor is the absence of domestic mutual fund ownership, which remains at 0%. Given that mutual funds typically conduct thorough research before investing, their lack of participation may reflect reservations about the company’s valuation or business fundamentals.
HMA Agro Inds. or something better? Our SwitchER feature analyzes this Smallcap FMCG stock and recommends superior alternatives based on fundamentals, momentum, and value!
- - SwitchER analysis complete
- - Superior alternatives found
- - Multi-parameter evaluation
Conclusion: Why the Stock is Falling
In summary, HMA Agro Industries’ share price decline as of 25-Nov is driven by a combination of weak long-term fundamentals, high leverage, and disappointing relative performance against market benchmarks. While the company’s recent quarterly results and profit growth offer some optimism, these have not yet translated into sustained investor confidence. The stock’s consistent underperformance over one year and year-to-date periods, coupled with falling investor participation and technical weakness, suggest that market participants remain cautious.
Investors are likely weighing the company’s attractive valuation and recent profit surge against its structural challenges and lack of institutional backing. Until there is clearer evidence of sustained operational improvement and debt management, the stock may continue to face downward pressure despite its pockets of positive financial data.
Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →
