Stock Performance and Market Context
On 26 Feb 2026, Arex Industries Ltd’s stock price touched Rs.120, the lowest level recorded in the past year. This represents a decline of 0.83% on the day, underperforming its sector by 0.59%. Notably, the stock opened at Rs.120 and traded consistently at this price throughout the session, reflecting a lack of intraday volatility. The share has also experienced erratic trading patterns, having missed trading on one day in the last 20 sessions.
Technical indicators show the stock trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling sustained downward momentum. This contrasts with the broader market, where the Sensex, despite closing marginally lower by 0.03% at 82,248.61 points, remains within 4.75% of its 52-week high of 86,159.02. The Sensex’s 50-day moving average remains above its 200-day average, indicating a generally positive medium-term trend for the benchmark index.
Over the past year, Arex Industries Ltd has delivered a total return of -24.05%, significantly lagging the Sensex’s 10.25% gain. The stock’s 52-week high was Rs.175, underscoring the extent of the recent decline.
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Financial Metrics and Profitability Analysis
Arex Industries Ltd’s financial performance has shown signs of strain, contributing to the stock’s subdued valuation. The company’s net sales have grown at a modest compound annual growth rate (CAGR) of 6.31% over the last five years, reflecting limited expansion in its core garment and apparel business.
Profitability metrics reveal further challenges. The average Return on Equity (ROE) stands at 8.59%, indicating relatively low profitability generated per unit of shareholders’ funds. The Return on Capital Employed (ROCE) is measured at 11.8%, which, while moderate, is accompanied by a very attractive valuation metric with an enterprise value to capital employed ratio of just 1.4. This suggests that the stock is trading at a discount relative to the capital invested in the business.
Recent quarterly results for December 2025 highlight subdued earnings. The Profit Before Depreciation, Interest and Taxes (PBDIT) was recorded at Rs.1.52 crore, the lowest in recent quarters. Operating profit as a percentage of net sales also declined to 11.70%, marking a low point in operational efficiency. Profit Before Tax (PBT) excluding other income was Rs.0.20 crore, signalling minimal profitability in the quarter.
Over the past year, profits have contracted by 26.6%, further weighing on investor sentiment and the stock’s market performance.
Shareholding and Valuation Considerations
The majority shareholding in Arex Industries Ltd is held by promoters, indicating concentrated ownership. This structure can influence strategic decisions and market perception.
Despite the recent price decline, the stock’s valuation remains attractive relative to its peers in the Garments & Apparels sector. The discount to historical peer valuations may reflect the market’s cautious stance given the company’s recent financial trends and subdued growth prospects.
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Comparative Performance and Market Position
Arex Industries Ltd’s performance over the medium and long term has been below par relative to broader market indices and sector benchmarks. The stock has underperformed the BSE500 index over the last three years, one year, and three months, reflecting persistent challenges in maintaining competitive growth and profitability.
The company’s Mojo Score currently stands at 17.0, with a Mojo Grade of Strong Sell as of 19 Jun 2025, an upgrade from the previous Sell rating. This grading reflects the assessment of the company’s fundamental strength, financial health, and market positioning.
Market capitalisation grading is at 4, indicating a micro-cap status with associated liquidity and volatility considerations. The stock’s erratic trading pattern, including a missed trading day in the recent past, further highlights liquidity constraints.
In the context of the broader Garments & Apparels sector, Arex Industries Ltd’s valuation and financial metrics suggest a cautious stance by market participants, despite the sector’s overall dynamics.
Summary of Key Data Points
• New 52-week low price: Rs.120
• Day change: -0.83%
• Underperformance vs sector: -0.59%
• 1-year stock return: -24.05%
• Sensex 1-year return: +10.25%
• 5-year CAGR net sales growth: 6.31%
• Average ROE: 8.59%
• ROCE: 11.8%
• PBDIT (Dec 2025 quarter): Rs.1.52 crore
• Operating profit to net sales (Dec 2025 quarter): 11.70%
• PBT less other income (Dec 2025 quarter): Rs.0.20 crore
• Enterprise value to capital employed: 1.4
• Mojo Score: 17.0 (Strong Sell)
• Market Cap Grade: 4 (micro-cap)
• Promoter shareholding: Majority
While the stock’s recent decline to Rs.120 marks a significant technical milestone, it is underpinned by a combination of subdued financial performance, valuation considerations, and market dynamics within the Garments & Apparels sector.
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