Recent Price Movements and Market Context
The stock touched an intraday low of Rs.100.5, representing a 3.37% decline on the day and underperforming its sector by 1.29%. Over the past three trading days, Fratelli Vineyards Ltd has lost 5.17% in value, signalling sustained selling pressure. The share price currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, underscoring a bearish technical outlook.
In contrast, the broader market has shown resilience. The Sensex opened lower at 84,620.40, down 442.94 points or 0.52%, but has since recovered slightly to trade at 84,889.96, a 0.2% decline. The Sensex remains close to its 52-week high of 86,159.02, just 1.49% away, and is supported by bullish moving averages with the 50-day DMA above the 200-day DMA.
Long-Term Performance and Valuation Trends
Fratelli Vineyards Ltd’s one-year performance starkly contrasts with the broader market. The stock has declined by 68.39% over the past year, while the Sensex has gained 8.50%. The 52-week high for the stock was Rs.341.45, highlighting the extent of the recent decline. This underperformance is further emphasised when compared to the BSE500 index, which has delivered 6.99% returns in the same period.
The stock’s valuation appears stretched relative to its historical averages, with a notable deterioration in profitability metrics. Over the last year, profits have fallen by 1383%, reflecting significant financial strain.
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Financial Health and Profitability Concerns
Fratelli Vineyards Ltd’s financial indicators reveal ongoing difficulties. The company has reported losses for four consecutive quarters, with the latest half-year figures showing net sales of Rs.82.39 crores, a decline of 61.18%. Correspondingly, the profit after tax (PAT) for the same period was negative Rs.9.13 crores, also down by 61.18%.
The return on capital employed (ROCE) for the half-year stands at a low of -1.17%, reflecting limited efficiency in generating returns from capital invested. The company’s ability to service debt is constrained, with a high Debt to EBITDA ratio of 4.54 times, indicating elevated leverage and financial risk.
Operating profits have deteriorated sharply over the past five years, with a compound annual growth rate (CAGR) of -160.50%. This weak long-term fundamental strength has contributed to a negative return on equity (ROE), underscoring challenges in delivering shareholder value.
Risk Profile and Market Sentiment
The stock’s Mojo Score currently stands at 3.0, with a Mojo Grade of Strong Sell, upgraded from Sell on 15 Jan 2025. This rating reflects the company’s deteriorated fundamentals and heightened risk profile. The market capitalisation grade is 4, indicating a mid-tier valuation relative to peers.
Despite the broader market’s positive momentum, Fratelli Vineyards Ltd remains under pressure, trading at levels that suggest cautious sentiment among market participants. The stock’s negative EBITDA and significant profit declines over the past year reinforce its classification as a higher-risk investment within the beverages sector.
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Shareholding and Sector Positioning
The majority shareholding in Fratelli Vineyards Ltd remains with the promoters, maintaining control over strategic decisions. The company operates within the beverages industry, a sector that has generally shown resilience but where Fratelli Vineyards Ltd’s performance has lagged behind peers.
Given the current financial metrics and stock price trajectory, the company’s position within the sector is under pressure, with valuation and profitability metrics signalling the need for careful monitoring.
Summary of Key Metrics
To summarise, the stock’s new 52-week low of Rs.100.5 reflects a sustained decline amid weak financial results and challenging market conditions. Key figures include:
- One-year stock return: -68.39%
- Sensex one-year return: +8.50%
- Debt to EBITDA ratio: 4.54 times
- Operating profit CAGR (5 years): -160.50%
- Net sales (latest six months): Rs.82.39 crores, down 61.18%
- PAT (latest six months): -Rs.9.13 crores, down 61.18%
- ROCE (half-year): -1.17%
- Mojo Score: 3.0 (Strong Sell)
The stock’s performance and financial indicators highlight the challenges faced by Fratelli Vineyards Ltd in maintaining growth and profitability in a competitive sector.
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