At a time when most of largecap cement stocks are witnessing subdued growth in their share price, a little-known cement manufacturer has defied all gravity and hit 5% upper circuit on a daily basis for the for the past 32 straight trading sessions. Shares of Hemadri Cements zoomed 446% in the past seven weeks after it relisted on the BSE on April 10. The counter touched a fresh record high of ₹32.80 on Wednesday after relisting at ₹6 per share.

Continuing its gaining streak, Hemadri Cements shares were locked in 5% upper circuit at ₹32.80 against the previous closing price of ₹31.24 on the BSE. The market capitalisation rose to ₹18.6 crore with just one share changing hands over the counter.

The rally in microcap stock has no fundamental basis. The company has been incurring losses for the last five quarters and posted loss of ₹3.8 crore in Q4FY23 compared with loss of ₹3.7 crore in the previous quarter and loss of ₹0.4 crore in the year ago period.

The total revenue of the company increased to ₹20.8 crore in March 2023 quarter from ₹18.8 crore in Q3FY23 and ₹23.2 crore in Q4FY22.

The operating loss stood at ₹9.9 crore versus loss of ₹3.3 crore in Q3FY23 and ₹0.8 crore in March 2022 quarter. The earnings per share (EPS) stood at -22.93 as the company continued to lose money.

For full financial year 2023, the cement maker reported a loss of ₹15.29 crore against a profit of ₹42.49 lakh in FY22. Revenue dropped 17.1% to ₹68.37 crore, while total debt climbed to ₹11.54 crore as of March 31, 2023, versus ₹4.78 crore in the last fiscal.

Given weak fundamental and negative earnings, investors should refrain from investing in such stocks. The counter may be hotly touted but investors should do due diligence and not make investment decision on the past performance of the stock.

Established in March 1985, Hemadri Cements is a cement manufacturing company located in Jaggayyapet, Andhra Pradesh. As per the information available on the BSE, the company’s cements surpass all the stringent quality Control parameters set by the Bureau of Indian Standards (B.I.S) and the Research & Consultancy Directorate. Both Hemadri 43 Grade and Hemadri Gold 53 Grade O.P.C are manufactured using Vedadri Lime Stone, renowned to be one of the best lime stones available in the country. The result is cement which has a high compressive strength, consistency and chemical characteristics for superior to any other brand available in the market.

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