Hilton Metal Forging Faces Financial Struggles Amid Declining Profit and Ownership Changes

Hilton Metal Forging, a microcap player in the castings and forgings industry, has recently undergone an adjustment in its evaluation. This revision reflects the company's ongoing challenges in financial performance, particularly highlighted by its results for the third quarter of FY24-25. The company has reported negative outcomes for four consecutive quarters, with a significant decline in profit after tax, which has contracted by 75.90% over the latest six-month period.
Key financial metrics indicate a weak long-term fundamental strength, as evidenced by an average Return on Capital Employed (ROCE) of 4.61%. Additionally, the company's net sales growth has been modest at an annual rate of 7.14%, while operating profit growth stands at 10.63% over the past five years. The ability to service debt remains a concern, with a high Debt to EBITDA ratio of 6.48 times.

Moreover, promoter holding has decreased to 28.31%, suggesting a shift in ownership dynamics. The stock has underperformed the broader market, with a return of -38.89% over the past year, contrasting sharply with the BSE 500's negative return of -0.36%.

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