Stock Performance and Market Context
On the trading day, Acme Resources Ltd's stock touched an intraday low of Rs.33.4, marking a decline of 4.57% from the previous close. The stock has been on a downward trajectory for two consecutive sessions, losing 7.22% over this period. This underperformance is notable against the sector, as the stock lagged the Non Banking Financial Company (NBFC) sector by 3.02% on the day.
Technical indicators also highlight the bearish trend, with the share price trading below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This sustained weakness in price levels underscores the challenges faced by the company in regaining investor confidence.
In comparison, the broader market index Sensex opened flat but subsequently declined by 401.73 points, or 0.53%, closing at 82,805.65. Despite this fall, Sensex remains 4.05% below its 52-week high of 86,159.02. The index has experienced a three-week consecutive decline, losing 3.45% in this period, indicating a cautious market environment overall.
Financial Performance and Valuation Concerns
Acme Resources Ltd’s financial metrics have been under pressure, contributing to the stock’s weak performance. The company’s long-term fundamentals remain subdued, with an average Return on Equity (ROE) of just 3.37%, signalling limited profitability relative to shareholder equity. This figure is considerably low for the NBFC sector, which typically demands stronger returns to justify valuations.
Net sales have contracted at an annualised rate of -5.35%, while operating profit has declined even more sharply at -12.38% per annum. The latest quarterly results for September 2025 revealed a Profit Before Tax (PBT) excluding other income of Rs.0.69 crore, down by 68.49% compared to the previous period. These figures highlight the persistent challenges in revenue growth and profitability.
Despite these weak earnings, the stock trades at a Price to Book Value (P/BV) of 0.7, which is relatively expensive given the company’s low ROE of 2 in the latest period. This premium valuation compared to peers’ historical averages has raised questions about the stock’s pricing in the market.
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Relative Performance and Market Comparison
Over the past year, Acme Resources Ltd has underperformed significantly, delivering a negative return of -17.30%. This contrasts sharply with the Sensex’s positive return of 7.43% over the same period, as well as the BSE500 index which generated 5.86% returns. The stock’s decline has been accompanied by a 15% fall in profits, further emphasising the company’s struggles relative to the broader market.
The stock’s 52-week high was Rs.45.88, indicating a substantial drop of approximately 27% from that peak to the current 52-week low. This wide price range reflects the volatility and investor caution surrounding the company’s prospects.
Shareholding and Market Sentiment
The majority shareholding in Acme Resources Ltd remains with the promoters, who continue to hold a controlling stake. Despite this, the stock’s Mojo Score has deteriorated to 17.0, with a Mojo Grade of Strong Sell as of 27 Dec 2024, an upgrade from the previous Sell rating. This grading reflects the market’s assessment of the company’s weak fundamentals and valuation concerns.
Market capitalisation grading stands at 4, indicating a relatively modest size within the NBFC sector. The stock’s day change of -0.29% on the reporting day adds to the overall negative sentiment.
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Summary of Key Metrics
To summarise, Acme Resources Ltd’s stock has reached a new 52-week low of Rs.33.4, reflecting ongoing pressures from weak financial performance and valuation concerns. The company’s average ROE of 3.37%, declining net sales and operating profits, and a significant drop in quarterly PBT have contributed to subdued investor sentiment. The stock’s premium valuation relative to its fundamentals and peers further complicates its market standing.
While the broader market and sector indices have experienced some volatility, Acme Resources Ltd’s underperformance remains pronounced, with a one-year return of -17.30% compared to positive returns in the Sensex and BSE500 indices. The stock’s technical indicators and recent price action suggest continued caution among market participants.
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