Why is SAL Automotive falling/rising?

Sep 12 2025 10:41 PM IST
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As of 12-Sep, SAL Automotive Ltd's stock price is declining at 258.95, down 0.37%, with a significant drop in delivery volume and a yearly return of -33.88%. The company faces challenges such as a high Debt to EBITDA ratio and low return on equity, contributing to its negative performance and lack of investor confidence.
As of 12-Sep, SAL Automotive Ltd is experiencing a decline in its stock price, currently at 258.95, which reflects a decrease of 0.95 or 0.37%. The stock has underperformed its sector today by 1.11% and has fallen after two consecutive days of gains. Additionally, the stock's delivery volume has significantly decreased by 84.84% compared to the 5-day average, indicating a drop in investor participation. Over the past year, the stock has generated a return of -33.88%, which is substantially worse than the broader market's decline of -1.28%. Despite a healthy long-term growth rate in net sales of 39.82%, the company faces challenges such as a high Debt to EBITDA ratio of 8.88 times, which suggests a low ability to service debt and contributes to its negative stock performance.

In the broader market context, the stock's short-term performance has been notably weaker than the benchmark, with a 1-week return of -0.77% compared to the Sensex's gain of 1.48%. This underperformance is compounded by the company's low return on equity of 7.37%, indicating low profitability per unit of shareholders' funds. Although the stock is trading at a discount compared to its peers' average historical valuations, the significant drop in its stock price over the past year and the flat results reported in June have led to a lack of investor confidence. Overall, these factors contribute to the stock's current downward trend.
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