Key Events This Week
Feb 9: Q2 FY26 results reveal deepening losses
Feb 10: Strong quarterly turnaround reported with improved profitability
Feb 11: Sharp 7.00% price drop on heavy volume
Feb 12: Price rebounds 6.93% on low volume
Feb 13: Week closes lower at Rs.30.32 (-6.04%) amid market weakness
9 February 2026: Losses Deepen as Operational Challenges Mount
CHL Ltd opened the week on a cautious note, closing at Rs.32.05, down 1.75% from the previous close. The day’s trading reflected investor concerns following the release of Q2 FY26 results that highlighted deepening losses and operational challenges. Despite the Sensex gaining 1.04% to 37,113.23, CHL’s stock lagged, signalling sector-specific headwinds and market scepticism about near-term recovery prospects.
10 February 2026: Strong Quarterly Turnaround Reported
The stock rebounded to close at Rs.32.45, up 1.25%, on increased volume of 757 shares. This followed the announcement of a strong quarterly turnaround for December 2025, with net sales reaching ₹40.92 crores and operating profit margin expanding to 29.94%. The company reported a net profit after tax of ₹3.97 crores and an EPS of ₹0.72, marking the highest quarterly earnings in recent history. Despite these improvements, the stock’s modest gain contrasted with the Sensex’s 0.25% rise, reflecting lingering concerns over elevated leverage and reliance on non-operating income.
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11 February 2026: Sharp Decline on Heavy Volume
On 11 Feb, CHL Ltd’s stock plunged 7.00% to Rs.30.18 on a significant volume surge to 6,231 shares, signalling strong selling pressure. This sharp decline occurred despite the Sensex edging up 0.13% to 37,256.72, underscoring the stock’s vulnerability to profit-taking or negative sentiment. The drop followed the previous day’s positive quarterly results, suggesting that investors may have been cautious about the company’s elevated debt-equity ratio of -2.38 times and the substantial contribution of non-operating income to profits.
12 February 2026: Price Rebounds Amid Thin Trading
The stock partially recovered, gaining 6.93% to close at Rs.32.27, though on very low volume of 56 shares. This rebound contrasted with the Sensex’s 0.56% decline to 37,049.40, indicating selective buying interest possibly driven by the company’s improved operating profit coverage ratio of 2.39 times and enhanced liquidity position with cash equivalents at ₹39.52 crores. However, the thin trading volume suggests limited conviction behind the rally.
13 February 2026: Week Ends Lower on Market Weakness
CHL Ltd’s stock closed the week at Rs.30.32, down 6.04% on volume of 1,140 shares, amid a broader market sell-off with the Sensex falling 1.40% to 36,532.48. The week’s overall 7.05% decline in CHL’s share price significantly outpaced the Sensex’s 0.54% fall, reflecting persistent investor caution despite the company’s quarterly turnaround. The stock’s volatility and underperformance highlight ongoing concerns about capital utilisation efficiency, with ROCE at 10.09%, and the sustainability of earnings given the high proportion of non-operating income.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-09 | Rs.32.05 | -1.75% | 37,113.23 | +1.04% |
| 2026-02-10 | Rs.32.45 | +1.25% | 37,207.34 | +0.25% |
| 2026-02-11 | Rs.30.18 | -7.00% | 37,256.72 | +0.13% |
| 2026-02-12 | Rs.32.27 | +6.93% | 37,049.40 | -0.56% |
| 2026-02-13 | Rs.30.32 | -6.04% | 36,532.48 | -1.40% |
Key Takeaways from the Week
Positive Signals: The company’s December quarter showed a clear turnaround with highest recent net sales of ₹40.92 crores and a strong operating profit margin of 29.94%. The net profit after tax of ₹3.97 crores and EPS of ₹0.72 mark a significant improvement. Enhanced liquidity with ₹39.52 crores in cash and a healthy operating profit to interest coverage ratio of 2.39 times provide a stronger financial base.
Cautionary Signals: Despite operational gains, the stock’s weekly decline of 7.05% and underperformance relative to the Sensex’s 0.54% fall highlight investor wariness. Elevated leverage with a negative debt-equity ratio of -2.38 times and a low ROCE of 10.09% raise concerns about capital efficiency and financial risk. The substantial 51.25% contribution of non-operating income to profit before tax questions the sustainability of earnings growth.
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Conclusion
CHL Ltd’s week was characterised by a strong quarterly earnings turnaround overshadowed by significant share price volatility and a steep weekly decline. While the company demonstrated improved revenue growth, profitability, and liquidity, the stock’s underperformance relative to the Sensex and persistent concerns over leverage and capital efficiency tempered investor enthusiasm. The mixed signals from operational metrics and market reaction suggest that CHL Ltd remains in a transitional phase, with cautious market sentiment prevailing despite recent financial progress.
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