Stock Price Movement and Market Context
On 20 Feb 2026, Fairchem Organics Ltd’s share price experienced notable volatility, opening with an 8.75% gain and reaching an intraday high of Rs.661.3. However, the stock reversed course sharply, closing at Rs.595, down 1.13% on the day and underperforming its sector by 1.51%. This closing price represents the lowest level the stock has traded at in the past 52 weeks, a stark contrast to its 52-week high of Rs.1,100.
The stock has been on a downward trajectory for the last two trading sessions, cumulatively losing 3.2% in returns during this period. Intraday volatility was elevated at 10.16%, reflecting significant price swings throughout the day. Additionally, Fairchem Organics is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bearish momentum.
Meanwhile, the broader market displayed resilience. The Sensex, after an initial negative opening down 225.65 points, rebounded sharply by 538.07 points to close at 82,810.56, up 0.38%. The benchmark index remains within 4.04% of its 52-week high of 86,159.02, supported by gains in mega-cap stocks. Despite this positive market backdrop, Fairchem Organics has lagged significantly, with a one-year return of -38.66% compared to the Sensex’s 9.35% gain.
Financial Performance and Valuation Metrics
Fairchem Organics’ financial results have reflected a challenging environment. The company has reported negative earnings for six consecutive quarters, with the latest half-year profit after tax (PAT) at Rs.1.55 crore, representing a decline of 79.42% year-on-year. Quarterly net sales have also contracted, with the most recent quarter recording Rs.100.13 crore, the lowest in recent periods.
Operating profit has deteriorated at an annualised rate of -33.06% over the past five years, underscoring persistent pressure on the company’s core earnings. Return on capital employed (ROCE) for the half-year stands at a subdued 3.47%, indicating limited efficiency in generating returns from invested capital.
Despite these headwinds, the company maintains a relatively strong debt servicing capacity, with a Debt to EBITDA ratio of 1.11 times. This suggests manageable leverage levels in relation to earnings before interest, taxes, depreciation, and amortisation.
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Long-Term and Recent Performance Trends
Over the past year, Fairchem Organics has underperformed not only the Sensex but also the BSE500 index across multiple time frames including three years, one year, and three months. The stock’s cumulative return of -38.66% over the last 12 months contrasts sharply with the broader market’s positive trajectory.
Profitability has also been under pressure, with profits declining by approximately 90% over the same period. This deterioration in earnings has contributed to the stock’s current valuation discount relative to its peers. The company’s enterprise value to capital employed ratio stands at 2.4, which is considered fair but below the average historical valuations of comparable firms in the Specialty Chemicals sector.
Sector and Market Position
Fairchem Organics operates within the Specialty Chemicals industry, a sector that has seen mixed performance in recent times. While the broader market and mega-cap stocks have shown strength, the company’s stock has not mirrored this trend, reflecting company-specific challenges and subdued financial metrics.
The company’s Mojo Score currently stands at 26.0, with a Mojo Grade of Strong Sell as of 17 Feb 2026, an upgrade from the previous Sell rating. This grading reflects the ongoing concerns regarding the company’s growth prospects and financial health.
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Summary of Key Metrics
To summarise, Fairchem Organics Ltd’s stock has reached a new 52-week low of Rs.595, reflecting a continuation of a downward trend amid weak financial results and subdued profitability. The company’s operating profit has declined at an annualised rate of -33.06% over five years, with recent quarters showing negative earnings and a significant drop in PAT. Despite a manageable debt profile, the company’s return on capital employed remains low at 3.47%, and net sales have contracted to Rs.100.13 crore in the latest quarter.
The stock’s performance has lagged the broader market and sector indices, with a one-year return of -38.66% compared to the Sensex’s 9.35% gain. Trading below all major moving averages and exhibiting high intraday volatility, the stock’s current valuation is discounted relative to peers, with an enterprise value to capital employed ratio of 2.4.
Market Outlook and Positioning
While the broader market has shown resilience, supported by mega-cap gains and a Sensex close to its 52-week high, Fairchem Organics Ltd’s share price performance highlights ongoing challenges within the company’s financial and operational landscape. The stock’s Mojo Grade of Strong Sell reflects these concerns, underscoring the cautious stance reflected in its current market valuation.
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