Stock Price Movement and Trading Patterns
On the day the 52-week low was recorded, Arex Industries opened with a notable gap up of 5%, reaching an intraday high of Rs.126. Despite this initial strength, the stock closed lower, registering a day change of -1.67%, underperforming its sector by 0.65%. The stock has experienced a consecutive two-day decline, resulting in a cumulative loss of 2.48% over this period. Trading activity has been somewhat erratic, with the stock not trading on one of the last 20 trading days, indicating intermittent liquidity concerns.
Technical indicators show that Arex Industries is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This broad weakness across multiple timeframes underscores the prevailing bearish sentiment among market participants.
Market Context and Comparative Performance
The broader market environment has also been challenging. The Nifty index closed at 25,178.65, down 317.9 points or 1.25% on the same day, remaining 4.74% below its 52-week high of 26,373.20. While the Nifty trades below its 50-day moving average, the 50DMA remains above the 200DMA, suggesting some underlying resilience in the medium term. However, all market capitalisation segments are experiencing declines, with Large Cap stocks exerting the greatest downward pressure. The Nifty Next 50 index fell by 1.3%, reflecting widespread weakness across market segments.
Against this backdrop, Arex Industries’ one-year performance stands at -19.18%, significantly lagging the Sensex’s positive return of 8.95% over the same period. The stock’s 52-week high was Rs.175, highlighting the extent of the recent decline.
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Fundamental Performance and Valuation Metrics
Arex Industries’ fundamental profile has been under pressure, contributing to its current valuation and market sentiment. The company’s long-term net sales growth has been modest, with a compound annual growth rate (CAGR) of 6.31% over the past five years. Profitability metrics have been subdued, with an average Return on Equity (ROE) of 8.59%, indicating relatively low returns generated on shareholders’ funds.
Recent quarterly results for December 2025 further illustrate the challenges faced. The company reported its lowest quarterly PBDIT at Rs.1.52 crore, with an operating profit to net sales ratio of 11.70%, also the lowest recorded in recent periods. Profit before tax excluding other income (PBT less OI) stood at a minimal Rs.0.20 crore, reflecting tight margins and limited earnings capacity.
These results align with the stock’s underperformance over multiple time horizons. In addition to the one-year return of -19.18%, Arex Industries has lagged the BSE500 index over the last three years, one year, and three months, underscoring persistent challenges in both near and long-term performance.
Valuation and Capital Efficiency
Despite the subdued earnings and price performance, Arex Industries exhibits some attractive valuation characteristics. The company’s Return on Capital Employed (ROCE) is reported at 11.8%, which, combined with an enterprise value to capital employed ratio of 1.4, suggests a valuation discount relative to its capital base. This valuation is lower than the average historical valuations of its peers in the Garments & Apparels sector, indicating that the stock is trading at a relative discount.
However, profitability trends remain a concern, with profits declining by 26.6% over the past year. This contraction in earnings has contributed to the stock’s downward momentum and the recent 52-week low.
Shareholding and Market Grade
The majority shareholding in Arex Industries is held by promoters, maintaining a concentrated ownership structure. The company’s overall market capitalisation grade is rated at 4, reflecting its micro-cap status within the Garments & Apparels sector.
In terms of market sentiment and analytical grading, Arex Industries currently holds a Mojo Score of 17.0 and a Mojo Grade of Strong Sell, an upgrade from its previous Sell rating as of 19 June 2025. This grading reflects the stock’s weak long-term fundamentals and recent financial performance.
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Summary of Key Metrics
To summarise, Arex Industries Ltd’s stock has reached a new 52-week low of Rs.118, reflecting a sustained period of price weakness. The stock’s performance has been below sector and market benchmarks, with a one-year return of -19.18% compared to the Sensex’s 8.95% gain. Financial results indicate low profitability and declining earnings, with the latest quarterly PBDIT and PBT less other income figures at their lowest levels in recent history.
Valuation metrics suggest the stock is trading at a discount relative to peers, supported by a ROCE of 11.8% and an enterprise value to capital employed ratio of 1.4. Nonetheless, the overall grading remains at Strong Sell, reflecting the combination of weak fundamentals and price performance.
Market conditions have been broadly negative, with the Nifty index and all market capitalisation segments experiencing declines. Arex Industries’ trading below all major moving averages further emphasises the current downtrend.
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