Sharda Motor Industries Faces Evaluation Adjustment Amidst Mixed Financial Performance

Apr 22 2025 08:19 AM IST
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Sharda Motor Industries, a small-cap auto ancillary firm, has experienced a change in its quality grade. The company has shown strong sales and EBIT growth over five years, alongside a favorable debt profile. However, it reported flat financial performance for the last quarter, contributing to the recent evaluation adjustment.
Sharda Motor Industries, a small-cap player in the auto ancillary sector, has recently undergone an adjustment in its evaluation. This revision reflects a change in the company's quality grade, moving from excellent to good.

The company has demonstrated notable metrics over the past five years, including a sales growth rate of 23.68% and an EBIT growth rate of 34.79%. Additionally, Sharda Motor maintains a robust EBIT to interest ratio, indicating strong earnings relative to its interest obligations. The company's debt profile is favorable, with a net debt to equity ratio of zero, suggesting minimal leverage.

Despite these strengths, the company reported flat financial performance for the quarter ending December 2024, with a profit before tax of Rs 79.89 crore and a profit after tax of Rs 75.44 crore, reflecting a decline of 5.6%. The stock's technical indicators have also shown a bearish trend, contributing to the recent evaluation adjustment.

Overall, Sharda Motor Industries continues to exhibit high management efficiency, evidenced by a return on equity of 25.17%, and a healthy operating profit growth rate.

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