Recent Price Movement and Market Context
The stock of Agarwal Industrial Corporation has been on a downward trajectory for the past three consecutive trading sessions, resulting in a cumulative return of -4.08% over this period. Today’s trading saw the stock hit Rs.739.15, its lowest level in the past year, within a narrow intraday range of Rs.6.95. This performance contrasts with the broader market, where the Sensex recovered from an initial dip to close marginally higher at 85,288.46, just 1.02% shy of its 52-week high of 86,159.02. The Sensex’s positive momentum was supported by mega-cap stocks and its position above key moving averages, signalling a generally bullish market environment.
The underperformance of Agarwal Industrial Corporation is further highlighted by its trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical positioning indicates sustained selling pressure and a lack of upward momentum in the stock price.
Financial Performance and Profitability Metrics
Over the last year, Agarwal Industrial Corporation’s stock has generated a return of -41.34%, a stark contrast to the Sensex’s 4.28% gain during the same period. The company’s 52-week high was Rs.1,383.15, underscoring the extent of the decline. The recent financial disclosures reveal a fall in earnings per share (EPS) by 7.98%, accompanied by two consecutive quarters of negative results. The latest quarterly profit after tax (PAT) stood at Rs.11.99 crore, reflecting a reduction of 46.5% compared to the average of the previous four quarters.
Return on capital employed (ROCE) for the half-year period is reported at 12.30%, which is among the lowest levels recorded by the company. Additionally, the operating profit to interest coverage ratio for the quarter is at 4.12 times, indicating a modest cushion for servicing interest obligations but lower than historical norms.
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Long-Term and Sectoral Performance
In addition to recent quarterly results, Agarwal Industrial Corporation’s longer-term performance has been below par. The stock has underperformed the BSE500 index over the last three years, one year, and three months. This trend reflects persistent challenges in maintaining competitive growth and profitability within the petrochemicals sector.
Despite the company’s sizeable market presence, domestic mutual funds hold no stake in Agarwal Industrial Corporation. This absence of institutional ownership may indicate a cautious stance towards the stock’s valuation or business prospects within the domestic investment community.
Balance Sheet and Valuation Considerations
On a positive note, the company demonstrates a strong ability to service its debt, with a Debt to EBITDA ratio of 1.26 times, suggesting manageable leverage levels. Net sales have shown a compound annual growth rate of 25.24%, indicating healthy top-line expansion over the longer term.
Valuation metrics reveal an enterprise value to capital employed ratio of 1.5, which is considered attractive relative to peers. The company’s return on capital employed (ROCE) stands at 11.9%, supporting the notion of value in the stock despite recent price declines. However, profits over the past year have fallen by 32.4%, aligning with the downward trend in the share price.
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Summary of Key Metrics
Agarwal Industrial Corporation’s stock price decline to Rs.739.15 marks a significant low point within the last 52 weeks, reflecting a combination of subdued earnings, reduced profitability, and technical weakness. The company’s financial indicators show a contraction in profits and returns, while sales growth and debt servicing capacity remain relatively stable. The stock’s position below all major moving averages and its underperformance relative to the broader market highlight ongoing challenges in regaining investor confidence.
While the broader Sensex trades near its 52-week high supported by mega-cap strength, Agarwal Industrial Corporation’s share price continues to reflect pressures specific to its sector and company fundamentals. The absence of domestic mutual fund holdings further underscores a cautious market assessment of the stock’s current valuation and business outlook.
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