Why is Kirl. Electric falling/rising?
As of 01-Sep, Kirloskar Electric Company Ltd is priced at 115.70, showing a short-term gain after a decline, but has significantly underperformed over the past week and month. Weak long-term fundamentals and a high promoter pledge raise concerns about its future performance.
As of 01-Sep, Kirloskar Electric Company Ltd is currently priced at 115.70, reflecting an increase of 1.2 or 1.05%. The stock has shown a trend reversal today, gaining after five consecutive days of decline, and reached an intraday high of Rs 117.5, which is a 2.62% increase. However, despite this short-term gain, the stock has underperformed significantly over the past week and month, with returns of -2.77% and -6.24%, respectively. The company's long-term fundamentals are weak, evidenced by a low Return on Capital Employed (ROCE) of 7.71% and a high Debt to EBITDA ratio of 3.75 times, which raises concerns about its ability to service debt. Additionally, 75.55% of promoter shares are pledged, which can exert downward pressure on the stock in a falling market.Broader Market Context: In comparison to the benchmark, the Sensex has shown a decline of only -1.56% over the past week and -0.29% over the past month, indicating that Kirloskar Electric's performance has been significantly worse than the broader market. While the stock's recent price movement reflects a slight recovery, its year-to-date performance is notably poor at -33.90%, contrasting sharply with the Sensex's positive return of +2.85%. This underperformance, combined with the company's weak financial metrics and high promoter pledge, suggests that the stock may continue to face challenges despite today's uptick.
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