The share price of real estate firm Omaxe recently hit a new 52-week low of ₹71.81 per share, reflecting the company’s growing financial struggles. This drop comes at a time when broader stock markets are performing strongly, with Sensex and Nifty posting their best weekly gains in nearly four years.
In contrast to its current performance, Omaxe’s stock had reached a 52-week high of ₹162.45 per share on July 30 last year.
Omaxe Stock Performance on Friday
On the last trading day of the week (Friday), Omaxe shares opened at ₹74.75. During the session, the stock reached a high of ₹78.00 but also dropped to ₹74.41. By market close, the stock gained slightly and ended at ₹77, up ₹2.81 or 3.79%. Despite this minor recovery, the company’s long-term challenges remain significant.
Key Financial Challenges
Omaxe is facing several financial hurdles, including rising operational losses and a concerning debt-to-EBITDA ratio of 7.49 times. The company has posted negative results for three consecutive quarters due to declining sales and shrinking profits.
In the December quarter of FY25 (Q3 FY25), Omaxe reported:
- Net Loss: ₹150.59 crore, a sharp fall of 109.82% compared to a loss of ₹71.77 crore in the same period last year (FY23).
- Net Sales: ₹288.94 crore, down 51.78% from ₹599.21 crore in December 2023.
- EBITDA: Negative ₹115.30 crore, reflecting a 232.18% drop from ₹34.71 crore in the previous fiscal’s December quarter.
Legal Issues Adding to Omaxe’s Woes
Apart from financial losses, Omaxe has been dealing with legal issues. Recently, the State Consumer Disputes Redressal Commission in Chandigarh directed Omaxe Chandigarh Extension Developers Private Limited to compensate a homebuyer. The company had failed to deliver possession of a flat in one of its housing projects, despite a delay of over six years.
In response, Omaxe claimed the delay was due to “force majeure” conditions, including legal complications and disruptions caused by the COVID-19 pandemic.
Conclusion
Omaxe’s falling share price, combined with operational losses, mounting debt, and legal challenges, paints a concerning picture for investors. While the company has cited unforeseen circumstances for its struggles, it will need to address its financial health and resolve pending legal issues to regain investor confidence.
