Recent Price Movement and Market Context
On the day the new low was recorded, Hikal Ltd’s stock fell by 2.85% intraday, closing with a day change of -1.67%. This decline extended a three-day losing streak during which the stock has shed 5.11% of its value. The stock’s performance notably lagged behind the Pharmaceuticals & Biotechnology sector, underperforming by 0.55% on the same day.
Hikal’s share price currently trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. In contrast, the broader Sensex index, despite a negative opening and a fall of 402.81 points (-0.65%) to 83,032.50, remains 3.77% shy of its 52-week high of 86,159.02. The Sensex’s 50-day moving average remains above its 200-day average, indicating a more stable medium-term trend compared to Hikal’s stock.
Long-Term Performance and Comparative Analysis
Over the past year, Hikal Ltd’s stock has delivered a negative return of -40.84%, a stark contrast to the Sensex’s positive 7.30% gain over the same period. The stock’s 52-week high was Rs.456.6, underscoring the magnitude of the decline from its peak. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index across one-year, three-year, and three-month timeframes.
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Financial Metrics and Profitability Concerns
Hikal Ltd’s financial profile reveals several areas of concern that have contributed to the stock’s decline. The company has experienced a negative compound annual growth rate (CAGR) of -16.24% in operating profits over the past five years, indicating weakening earnings capacity. This trend is compounded by a significant fall in earnings per share (EPS), which dropped by 320.54% in the September 2025 quarter, reflecting very negative quarterly results.
Profit after tax (PAT) for the latest quarter stood at a loss of Rs.34.90 crore, representing a 320.5% decline compared to the previous four-quarter average. The return on capital employed (ROCE) for the half-year period was recorded at a low 4.44%, while the operating profit to interest coverage ratio for the quarter was just 0.48 times, signalling limited ability to cover interest expenses from operating profits.
Debt and Capital Structure
The company’s debt servicing capacity remains constrained, with a high Debt to EBITDA ratio of 2.51 times. This elevated leverage ratio indicates increased financial risk and pressure on cash flows. Despite these challenges, the average return on equity (ROE) stands at 8.00%, which is modest and suggests limited profitability generated per unit of shareholders’ funds.
Valuation and Relative Positioning
From a valuation standpoint, Hikal Ltd presents an enterprise value to capital employed ratio of 1.8, which is considered attractive relative to its peers. The stock is trading at a discount compared to the average historical valuations of companies within the Pharmaceuticals & Biotechnology sector. However, this valuation advantage is tempered by the company’s declining profitability, with profits falling by 86.2% over the past year.
Shareholding and Market Sentiment
The majority shareholding in Hikal Ltd remains with the promoters, indicating concentrated ownership. The company’s Mojo Score currently stands at 12.0, with a Mojo Grade of Strong Sell as of 14 Nov 2025, an upgrade from the previous Sell rating. The market capitalisation grade is rated at 3, reflecting the company’s relative size and liquidity in the market.
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Summary of Performance Trends
Hikal Ltd’s stock has demonstrated below-par performance both in the long term and near term. The negative returns of -40.84% over the last year are accompanied by consistent underperformance relative to the BSE500 index across multiple time horizons. The company has reported negative results for two consecutive quarters, underscoring the challenges faced in maintaining profitability and growth momentum.
Despite the attractive valuation metrics relative to peers, the company’s financial health indicators and earnings trajectory have weighed heavily on investor sentiment, culminating in the recent 52-week low price of Rs.209.3.
Market Environment and Broader Indices
The broader market environment has been mixed, with the Sensex index experiencing a decline but maintaining a position close to its 52-week high. The index’s 50-day moving average remains above its 200-day moving average, suggesting a more stable medium-term outlook for the market overall. In contrast, Hikal Ltd’s share price continues to trend downward, reflecting company-specific factors rather than broader market weakness.
Conclusion
Hikal Ltd’s fall to a 52-week low of Rs.209.3 highlights the cumulative impact of subdued financial performance, declining profitability, and elevated leverage. The stock’s sustained underperformance relative to sector peers and market benchmarks reflects ongoing challenges in reversing negative earnings trends. While valuation metrics suggest some discount relative to peers, the company’s recent results and financial ratios indicate a cautious stance among market participants.
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