The stock recorded an intraday low of Rs.78.25, reflecting a day’s decline of 5.61%, underperforming its sector by 5.69%. This movement places Godavari Drugs well below its key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent downward momentum. In contrast, the broader market, represented by the Sensex, showed strength, closing at 85,186.47 points, up 0.61% and nearing its 52-week high of 85,290.06.
Over the past year, Godavari Drugs has delivered a return of -31.75%, significantly lagging behind the Sensex’s 9.81% gain. The stock’s 52-week high was Rs.133.90, highlighting the extent of the recent decline. This performance is also below the BSE500 benchmark over multiple time frames, including the last three years, one year, and three months.
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Financially, Godavari Drugs has shown subdued growth trends. Its net sales over the last nine months stood at Rs.75.96 crores, reflecting a contraction of 21.64% compared to the previous period. The company’s profit after tax (PAT) for the same period was Rs.2.93 crores, which declined by 45.83%. Operating cash flow for the year was reported at Rs.11.20 crores, marking one of the lowest levels in recent years.
Long-term growth metrics also indicate challenges. The compound annual growth rate (CAGR) for net sales over the past five years is negative at -0.27%. The company’s ability to service debt is constrained, with a Debt to EBITDA ratio of 3.27 times, suggesting elevated leverage relative to earnings before interest, taxes, depreciation, and amortisation.
Despite these headwinds, Godavari Drugs maintains a return on capital employed (ROCE) of 9.1%, which is considered relatively attractive within its sector. Its enterprise value to capital employed ratio stands at 1.2, indicating a valuation discount compared to peer averages. However, this valuation has not translated into positive stock performance over the past year, where profits have declined by 44.5%.
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Ownership of Godavari Drugs remains concentrated with promoters holding the majority stake. The company operates within the Pharmaceuticals & Biotechnology industry, a sector that has generally seen mixed performance amid evolving market dynamics and regulatory environments.
On the broader market front, the Sensex’s positive trajectory contrasts with Godavari Drugs’ performance. The Sensex is trading above its 50-day moving average, which itself is positioned above the 200-day moving average, indicating a bullish trend for the benchmark index. Mega-cap stocks have been leading this market rally, further highlighting the divergence between large-cap and micro-cap stock movements.
In summary, Godavari Drugs’ stock has reached a new 52-week low of Rs.78.25, reflecting ongoing pressures from declining sales, profitability, and elevated leverage. While the company’s valuation metrics suggest some relative attractiveness, the stock’s performance over the past year and longer periods has been subdued compared to broader market indices and sector peers.
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