Understanding the Current Rating
The Strong Sell rating assigned to National Peroxide Ltd indicates a cautious stance for investors, suggesting that the stock is expected to underperform relative to the broader market and its peers. This recommendation is based on a comprehensive evaluation of four key parameters: Quality, Valuation, Financial Trend, and Technicals. Each of these factors contributes to the overall assessment of the company’s investment appeal.
Quality Assessment
As of 04 January 2026, National Peroxide Ltd’s quality grade is categorised as below average. This reflects persistent challenges in the company’s fundamental strength. Over the past five years, the company has experienced a steep decline in operating profits, with a compound annual growth rate (CAGR) of -135.58%. Such a negative trajectory highlights difficulties in sustaining profitable operations and generating shareholder value.
Additionally, the company’s ability to service its debt remains weak, evidenced by an average EBIT to interest coverage ratio of just 0.14. This low ratio signals potential liquidity risks and limited cushion to meet interest obligations, which is a concern for creditors and investors alike. The return on equity (ROE) stands at a modest 1.90%, indicating limited profitability relative to shareholders’ funds and raising questions about capital efficiency.
Valuation Considerations
National Peroxide Ltd’s valuation grade is currently deemed risky. The stock trades at levels that suggest elevated risk compared to its historical averages. Investors should note that the company’s operating profits are negative, which undermines confidence in its earnings potential. Over the past year, the stock has delivered a return of -43.94%, reflecting significant market scepticism.
The decline in profits has been even more pronounced, with a fall of -113% over the same period. This disparity between stock price performance and earnings deterioration underscores the challenges the company faces in regaining investor trust and improving its financial health.
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- - Fundamental Analysis
- - Technical Signals
- - Peer Comparison
Financial Trend Analysis
The financial trend for National Peroxide Ltd is classified as flat, indicating stagnation rather than growth. The latest six-month results ending September 2025 reveal a profit after tax (PAT) of ₹1.28 crore, which has declined by 77.78% compared to previous periods. This sharp contraction in profitability is compounded by the fact that non-operating income constitutes 263.49% of profit before tax (PBT), suggesting that core business operations are underperforming and the company is relying heavily on non-recurring or ancillary income sources.
Such financial trends raise concerns about the sustainability of earnings and the company’s ability to generate consistent cash flows from its primary activities.
Technical Outlook
The technical grade for the stock is bearish, reflecting negative momentum in price action and market sentiment. The stock’s recent performance metrics illustrate this trend clearly: a 1-day gain of 0.33% is overshadowed by declines of 1.07% over one week, 9.54% over one month, and a steep 31.78% over six months. Year-to-date, the stock has marginally gained 0.41%, but the one-year return remains deeply negative at -43.94%.
Moreover, National Peroxide Ltd has underperformed the BSE500 index over the last three years, one year, and three months, signalling persistent weakness relative to the broader market. This technical weakness suggests limited near-term upside and heightened risk for investors considering entry at current levels.
Implications for Investors
For investors, the Strong Sell rating serves as a cautionary signal. It implies that the stock is expected to continue facing headwinds across multiple dimensions—fundamental quality, valuation risk, stagnant financial trends, and bearish technical indicators. Those holding the stock may want to reassess their positions in light of these factors, while prospective investors should carefully weigh the risks before committing capital.
It is important to note that this rating and analysis are based on the most recent data available as of 04 January 2026, ensuring that investment decisions are informed by the latest company performance and market conditions.
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Summary
In summary, National Peroxide Ltd’s current Strong Sell rating by MarketsMOJO reflects a comprehensive evaluation of its weak fundamental quality, risky valuation, flat financial trends, and bearish technical outlook. The company’s ongoing struggles with profitability, debt servicing, and market performance suggest that investors should exercise caution. While the stock may present opportunities for speculative traders, the prevailing data advises a defensive approach for long-term investors.
As always, investors are encouraged to monitor updates and conduct thorough due diligence before making investment decisions.
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