Recent Price Movement and Market Performance
The stock has been under pressure for several sessions, recording losses for four consecutive days with a cumulative decline of 6.61%. On the day in question, it hit a fresh 52-week low of ₹211.15, signalling sustained bearish momentum. The weighted average price indicates that a larger volume of shares traded near the day’s low, suggesting selling pressure dominated trading activity. Furthermore, Kabra Extrusion is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, reinforcing the negative technical outlook.
Comparative Returns Highlight Underperformance
When compared with the broader market, Kabra Extrusion’s returns have been significantly disappointing. Over the past week, the stock declined by 5.98%, markedly worse than the Sensex’s 1.18% drop. The trend persists over longer periods: a 4.05% fall in the last month versus a 1.08% decline in the Sensex, and a year-to-date loss of 6.30% compared to the Sensex’s 1.22% fall. Most strikingly, the stock has plummeted by over 60% in the last year, while the Sensex has gained 7.72%. Over three and five years, the stock’s performance remains weak relative to the benchmark, despite a positive 5-year return of 101.42%, which still trails the Sensex’s 72.56% gain.
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Financial Weaknesses Weigh on Investor Confidence
Kabra Extrusion’s financial performance has been a significant drag on its share price. The company has reported negative results for three consecutive quarters, with profit before tax less other income (PBT less OI) falling by 111.91% to a loss of ₹1.70 crore in the latest quarter. Net profit after tax (PAT) has also plummeted by 97.3%, registering a marginal ₹0.33 crore. These figures highlight a deteriorating profitability trend that has alarmed investors.
The company’s operating profit has declined at an alarming annual rate of 136.62% over the past five years, signalling poor long-term growth prospects. Additionally, the debt-equity ratio has surged to 3.16 times as of the half-year mark, indicating increased leverage and financial risk. Although the company maintains a relatively low Debt to EBITDA ratio of 1.23 times, the rising debt-equity ratio and negative operating profits contribute to a risky investment profile.
Investor Participation and Liquidity Trends
Investor interest appears to be waning, as evidenced by a 25.61% drop in delivery volume on 07 Jan compared to the five-day average. This decline in investor participation suggests reduced confidence in the stock’s near-term prospects. Despite this, liquidity remains adequate for small trade sizes, with the stock’s traded value supporting transactions of approximately ₹0.01 crore based on 2% of the five-day average traded value.
Market Sentiment and Institutional Interest
Institutional investors, particularly domestic mutual funds, hold a negligible stake of just 0.03% in Kabra Extrusion. Given their capacity for thorough research and due diligence, this minimal exposure may reflect concerns about the company’s valuation or business fundamentals. The stock’s risk profile is further underscored by its trading at valuations that are considered risky relative to historical averages.
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Conclusion: Why Kabra Extrusion’s Stock Is Falling
The decline in Kabra Extrusion Technik Ltd’s share price on 08-Jan is primarily driven by a combination of weak financial results, poor long-term growth, and negative investor sentiment. The company’s consistent quarterly losses, deteriorating profitability, and rising leverage have undermined confidence. This is compounded by the stock’s underperformance relative to the Sensex and sector peers, as well as declining investor participation. The lack of significant institutional backing further signals caution among professional investors. While the company’s ability to service debt remains a positive factor, it is insufficient to offset the broader concerns weighing on the stock. Consequently, Kabra Extrusion continues to face downward pressure, reflected in its recent price action and technical indicators.
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