Arex Industries Ltd Falls to 52-Week Low Amidst Continued Underperformance

Stock Price Movement and Market Context

On 23 Feb 2026, Arex Industries Ltd’s stock opened sharply lower, registering a gap down of 5.00% and settling at Rs.123.5, which also represented the day’s low. The stock has traded at this level throughout the session, showing no intraday recovery. This price point is notably below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.

In comparison, the Sensex index demonstrated resilience, climbing 387.83 points or 0.58% to close at 83,294.66, inching closer to its 52-week high of 86,159.02. The broader market’s positive trajectory contrasts with Arex Industries’ declining trend, highlighting the stock’s relative weakness. The Garments & Apparels sector, to which Arex belongs, outperformed the stock by 4.24% today, further emphasising the stock’s laggard status.

Additionally, the stock’s trading activity has been somewhat erratic, with one day of non-trading in the last 20 sessions, indicating intermittent liquidity concerns.

Financial Performance and Valuation Metrics

Arex Industries Ltd’s financial performance has been subdued over recent periods. The company reported its lowest quarterly PBDIT at Rs.1.52 crore, with an operating profit to net sales ratio dropping to 11.70%, indicating margin pressures. The Profit Before Tax (PBT) excluding other income also hit a low of Rs.0.20 crore in the latest quarter, reflecting constrained profitability.

Over the last five years, the company has achieved a modest compound annual growth rate (CAGR) of 6.31% in net sales, which is relatively weak for the Garments & Apparels sector. Return on Equity (ROE) averaged 8.59%, signalling limited efficiency in generating profits from shareholders’ funds. Return on Capital Employed (ROCE) stands at 11.8%, which, while moderate, is accompanied by a very attractive valuation metric of 1.5 enterprise value to capital employed, suggesting the stock is trading at a discount relative to its capital base.

Despite this valuation appeal, the stock’s price performance has been disappointing. Over the past year, Arex Industries has delivered a negative return of -22.30%, significantly underperforming the Sensex’s positive 10.60% return. Profitability has also declined by 26.6% during the same period, underscoring the challenges faced by the company in maintaining earnings growth.

Long-Term and Recent Performance Trends

Arex Industries Ltd’s stock has consistently underperformed not only the benchmark indices but also its sector and peer groups. The stock’s 52-week high was Rs.175, which it has now fallen well below, reaching Rs.123.5 today. This represents a substantial retracement of approximately 29.4% from its peak over the last year.

In addition to the one-year underperformance, the stock has lagged the BSE500 index over the last three years, one year, and three months, indicating persistent challenges in delivering shareholder value. The company’s Mojo Score currently stands at 17.0, with a Mojo Grade of Strong Sell, an upgrade in severity from the previous Sell rating issued on 19 Jun 2025. This grading reflects the deteriorated fundamentals and weak outlook based on MarketsMOJO’s comprehensive analysis framework.

Promoters remain the majority shareholders, maintaining control over the company’s strategic direction.

Summary of Key Concerns

The stock’s decline to a new 52-week low is underpinned by several factors. The company’s subdued sales growth and low profitability ratios have weighed on investor sentiment. The recent quarterly results highlighted the lowest operating profit margins and minimal pre-tax earnings, which have contributed to the negative price momentum.

Furthermore, the stock’s failure to maintain levels above critical moving averages signals a lack of positive technical momentum. The gap down opening and subsequent trading at the day’s low price reflect persistent selling pressure. The stock’s underperformance relative to both the Sensex and its sector peers further emphasises the challenges faced by Arex Industries Ltd in regaining investor confidence.

Despite a valuation that appears attractive on an enterprise value to capital employed basis, the company’s fundamental weaknesses and declining profitability have overshadowed this aspect.

Market Environment and Sectoral Context

The broader market environment remains positive, with the Sensex advancing steadily and mega-cap stocks leading gains. The Garments & Apparels sector has generally outperformed Arex Industries Ltd, indicating that the stock’s issues are company-specific rather than sector-wide. This divergence highlights the importance of individual company fundamentals in driving stock performance within the sector.

Investors monitoring the stock will note the contrast between the sector’s relative strength and Arex Industries’ ongoing challenges, as reflected in its recent price action and financial metrics.

Conclusion

Arex Industries Ltd’s fall to Rs.123.5, a fresh 52-week low, marks a continuation of its subdued performance trend amid weak financial results and valuation pressures. The stock’s underperformance relative to the Sensex and its sector peers, combined with deteriorating profitability and low growth rates, have contributed to the current price level. While the stock trades at a discount on certain valuation metrics, the prevailing financial and market indicators reflect ongoing challenges for the company within the Garments & Apparels sector.

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