Stock Performance and Market Context
On the day the new low was recorded, Hikal Ltd underperformed its sector by 1.25%, continuing a two-day losing streak that has resulted in a cumulative decline of 2.72%. The stock’s price now trades below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent bearish momentum.
In contrast, the broader market showed resilience. The Sensex, after an initial negative opening down by 167.26 points, rebounded sharply by 533.92 points to close at 81,089.60, up 0.45%. Despite the Sensex trading below its 50-day moving average, the 50DMA remains above the 200DMA, indicating a generally positive medium-term market trend. Mega-cap stocks led this recovery, highlighting a divergence between large-cap strength and Hikal’s ongoing weakness.
Long-Term and Recent Performance Metrics
Over the past year, Hikal Ltd’s stock has delivered a negative return of 47.19%, starkly underperforming the Sensex’s 4.62% gain over the same period. The stock’s 52-week high was Rs.456.6, underscoring the extent of the decline from its peak. This underperformance extends beyond the last year, with the stock lagging the BSE500 index across one-year, three-month, and three-year horizons.
Financially, the company’s long-term fundamentals have weakened. Operating profits have contracted at a compound annual growth rate (CAGR) of -16.24% over the last five years. The company’s ability to service debt remains constrained, with a Debt to EBITDA ratio of 2.51 times, indicating elevated leverage relative to earnings before interest, taxes, depreciation, and amortisation.
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Profitability and Earnings Trends
Hikal Ltd’s profitability metrics have deteriorated notably. The company reported a sharp fall in earnings per share (EPS) by 320.54% in the September 2025 quarter, reflecting very negative quarterly results. This marked the second consecutive quarter of negative earnings, with the latest quarterly profit after tax (PAT) at a loss of Rs.34.90 crore, a significant decline compared to the previous four-quarter average.
Return on capital employed (ROCE) for the half-year period stood at a low 4.44%, while the operating profit to interest coverage ratio dropped to 0.48 times in the latest quarter, indicating limited cushion to meet interest obligations from operating profits. The average return on equity (ROE) over recent periods has been 8.00%, signalling modest profitability relative to shareholders’ funds.
Valuation and Relative Positioning
Despite the subdued financial performance, Hikal Ltd’s valuation metrics suggest an attractive entry point relative to its peers. The company’s ROCE of 4.1% is accompanied by an enterprise value to capital employed ratio of 1.6, which is lower than the historical averages observed in the Pharmaceuticals & Biotechnology sector. This discount in valuation reflects the market’s cautious stance given the company’s recent earnings decline and leverage concerns.
Profitability has contracted sharply over the past year, with profits falling by 86.2%, further contributing to the stock’s downward pressure. The majority shareholding remains with promoters, maintaining a stable ownership structure despite the challenging financial environment.
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Mojo Score and Market Ratings
MarketsMOJO assigns Hikal Ltd a Mojo Score of 12.0, categorising the stock with a Strong Sell grade as of 14 Nov 2025, an upgrade from the previous Sell rating. The market capitalisation grade stands at 3, reflecting the company’s mid-tier size within the sector. This rating incorporates the company’s weak long-term growth, profitability challenges, and leverage concerns, which collectively weigh on the stock’s outlook.
Summary of Key Financial Indicators
To encapsulate, Hikal Ltd’s financial and market indicators present a challenging picture:
- One-year stock return: -47.19%
- Operating profit CAGR (5 years): -16.24%
- Debt to EBITDA ratio: 2.51 times
- EPS decline in latest quarter: -320.54%
- Quarterly PAT: Rs. -34.90 crore
- ROCE (half-year): 4.44%
- Operating profit to interest coverage (quarterly): 0.48 times
- Return on equity (average): 8.00%
- Enterprise value to capital employed: 1.6
These metrics highlight the pressures on profitability and earnings quality that have contributed to the stock’s recent lows.
Sector and Market Comparison
Within the Pharmaceuticals & Biotechnology sector, Hikal Ltd’s performance contrasts with broader market trends. While the sector has seen some resilience, Hikal’s stock has lagged significantly, reflecting company-specific factors rather than sector-wide dynamics. The stock’s discount to peer valuations underscores the market’s cautious stance on its near-term financial health.
Conclusion
Hikal Ltd’s fall to a 52-week low of Rs.187.1 on 2 Feb 2026 marks a continuation of a downward trend driven by deteriorating earnings, subdued profitability, and leverage concerns. Despite an attractive valuation relative to peers, the company’s financial indicators reflect ongoing challenges that have weighed on investor confidence and stock performance over the past year.
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