Solid Stone Company Reports Strong Sales Growth Amid Long-Term Financial Concerns in September 2023

Solid Stone Company, a microcap player in the Ceramics/Marble/Granite/Sanitaryware industry, has recently undergone an adjustment in evaluation. This revision reflects the company's underlying financial metrics and market position.
In the latest quarter, Q2 FY24-25, Solid Stone Company reported a notable increase in net sales, reaching Rs 7.27 crore, which represents a growth of 122.3%. Additionally, the operating cash flow peaked at Rs 4.55 crore, while the PBDIT also reached a high of Rs 1.07 crore. Despite these positive indicators, the company faces challenges with long-term fundamental strength, evidenced by a compound annual growth rate (CAGR) of -9.42% in net sales over the past five years.

The company's ability to service its debt is also a concern, as indicated by a high Debt to EBITDA ratio of 6.25 times. Furthermore, the average Return on Equity (ROE) stands at a modest 1.84%, suggesting limited profitability relative to shareholders' funds.

Overall, the stock's technical trend has shifted to a mildly bearish range, with various technical indicators reflecting bearish signals.

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