Arex Industries Ltd Falls to 52-Week Low of Rs.128.3 Amid Continued Underperformance

Intraday Price Movement and Trading Patterns

On the day in question, Arex Industries opened with a gap down, declining by 4.96% from its previous close. The stock remained at this low level throughout the trading session, touching an intraday low of Rs.128.3 and closing at the same price. Notably, the stock has exhibited erratic trading behaviour recently, having not traded on two separate days within the last 20 trading sessions. This irregularity adds to the cautious sentiment surrounding the stock.

Compared to its sector peers, Arex Industries underperformed by 3.78% on the day, reflecting broader challenges within the Garments & Apparels industry. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.

Market Context and Benchmark Comparison

While Arex Industries struggled, the broader market showed resilience. The Sensex, after an initial negative opening down by 140.93 points, rebounded to close marginally higher by 0.04% at 83,610.12. The benchmark index remains within 3.05% of its 52-week high of 86,159.02, supported by gains in mega-cap stocks. The Sensex’s 50-day moving average remains above its 200-day moving average, indicating a generally positive medium-term trend for the market overall.

In stark contrast, Arex Industries has delivered a negative return of 16.14% over the past year, significantly lagging the Sensex’s positive 8.05% gain. This divergence highlights the stock’s persistent underperformance relative to the broader market.

Financial Performance and Valuation Metrics

Arex Industries’ financial fundamentals have shown limited strength over recent years. The company has recorded a compound annual growth rate (CAGR) of 6.00% in net sales over the last five years, which is modest within the Garments & Apparels sector. Profitability metrics remain subdued, with an average return on equity (ROE) of 8.59%, indicating relatively low returns generated on shareholders’ funds.

Recent quarterly results for September 2025 were largely flat, providing little impetus for a change in market sentiment. Over the past year, profits have declined by 14.1%, compounding the negative return profile of the stock.

Despite these challenges, the company’s return on capital employed (ROCE) stands at 11.8%, which is considered attractive. The enterprise value to capital employed ratio is 1.6, suggesting that the stock is trading at a discount relative to its capital base. This valuation is lower than the average historical valuations of its peers, reflecting the market’s cautious stance.

Shareholding and Market Grade

The majority shareholding in Arex Industries remains with the promoters, maintaining a stable ownership structure. However, the stock’s overall market capitalisation grade is rated at 4, indicating a relatively modest market size within its sector.

MarketsMOJO assigns Arex Industries a Mojo Score of 26.0, categorising it as a Strong Sell. This represents a downgrade from its previous Sell rating, which was revised on 19 Jun 2025. The downgrade reflects the stock’s continued underperformance and deteriorating financial metrics.

Historical Price Range and Performance Trends

The stock’s 52-week high was Rs.175, reached earlier in the period, underscoring the extent of the recent decline to Rs.128.3. Over the last three years, Arex Industries has consistently underperformed the BSE500 benchmark, reinforcing a pattern of relative weakness.

Summary of Key Concerns

The stock’s decline to a new 52-week low is underpinned by a combination of factors including subdued sales growth, declining profits, and a return on equity that remains below sector averages. The persistent underperformance relative to both the Sensex and BSE500 indices over multiple years highlights structural challenges in the company’s financial trajectory.

Trading patterns characterised by erratic activity and a failure to sustain levels above key moving averages further contribute to the cautious market view. While valuation metrics such as ROCE and enterprise value to capital employed suggest some degree of attractiveness, these have not translated into positive price momentum.

Overall, Arex Industries Ltd’s stock performance reflects a complex interplay of modest growth, profitability pressures, and market sentiment within the Garments & Apparels sector.

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