Shares of Majestic Auto are down over 10% or by Rs. 7.75 and are now ruling at Rs. 68 per share. This is a Hero Group company; however its financial position continues to remain very weak.

The Ludhiana based auto component maker reported extremely poor performance for the December quarter as revenue halved QoQ to Rs. 17 crore (from Rs. 35 crore in Q2) with bottomline continuing to remain in red, infact in deep red, with net loss of Rs. 10.4 crore for Q3. EPS for the third quarter stands at negative 9.99. Save for exceptional gains, EPS for first 9 months of FY15 is Rs. 4.34 as against EPS of Rs. 54 for FY14.

Thus, poor order book (resulting in low topline) as well as low absorption of fixed costs (poor bottomline) make the company’s financial position very fragile. Company’s current market cap stands is approximately Rs. 70 crore, with promoter holding of 75%.