Stock Performance and Market Context
On 22 Jan 2026, Hikal Ltd’s stock price touched Rs.198.5, the lowest level recorded in the past year. This decline comes after three consecutive days of losses, during which the stock has fallen by 6.46%. Despite an intraday high of Rs.204.8, representing a 2.14% gain, the overall trend remains negative. The stock underperformed its Pharmaceuticals & Biotechnology sector by 2.16% on the day.
Hikal’s share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. This contrasts with the broader market, where the Sensex opened higher at 82,459.66 points, gaining 0.67%, though it is currently trading slightly lower at 82,231.32 points, down 0.39%. The Sensex remains 4.78% below its 52-week high of 86,159.02, and has experienced a 4.12% decline over the past three weeks. Mid-cap stocks, however, are leading gains with the BSE Mid Cap index up 1.11% today.
Financial Performance and Valuation Metrics
Hikal Ltd’s financial results have contributed to the stock’s weak performance. The company reported net sales of Rs.318.50 crore in the most recent quarter, a decline of 30.5% compared to the average of the previous four quarters. Profit after tax (PAT) registered a significant fall, posting a loss of Rs.34.90 crore, which represents a 320.5% decrease relative to the prior four-quarter average. This marks the second consecutive quarter of negative results for the company.
Return on Capital Employed (ROCE) for the half-year period stood at a low 4.44%, while the average Return on Equity (ROE) is 8.00%, indicating modest profitability relative to shareholders’ funds. The company’s ability to service debt is constrained, with a Debt to EBITDA ratio of 2.51 times, reflecting elevated leverage levels. Operating profits have contracted at a compound annual growth rate (CAGR) of -16.24% over the past five years, underscoring persistent challenges in generating sustainable earnings growth.
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Long-Term and Recent Trends
Over the last year, Hikal Ltd’s stock has declined by 45.31%, a stark contrast to the Sensex’s positive return of 7.65% over the same period. The stock’s 52-week high was Rs.456.6, highlighting the extent of the recent depreciation. The company’s underperformance extends beyond the last year, with returns lagging behind the BSE500 index over one year, three months, and three years.
The company’s Mojo Score currently stands at 12.0, with a Mojo Grade of Strong Sell, upgraded from a Sell rating on 14 Nov 2025. The Market Cap Grade is 3, reflecting a relatively modest market capitalisation within its peer group. These ratings underscore the cautious stance reflected in the stock’s valuation and performance metrics.
Valuation Considerations
Despite the subdued financial performance, Hikal Ltd’s valuation metrics suggest an attractive entry point relative to its peers. The company’s Enterprise Value to Capital Employed ratio is 1.7, indicating a discount compared to historical averages within the sector. However, this valuation is tempered by the company’s declining profitability, with profits falling by 86.2% over the past year.
The majority shareholding remains with promoters, maintaining a stable ownership structure amid the stock’s price volatility.
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Summary of Key Metrics
To summarise, Hikal Ltd’s stock has reached a 52-week low of Rs.198.5 amid a backdrop of declining sales, widening losses, and subdued returns on capital. The company’s financial indicators point to a period of contraction, with operating profits shrinking at a negative CAGR over five years and recent quarterly results reflecting significant declines in both revenue and profitability.
While the stock trades at a discount relative to peers, the combination of high leverage and low profitability metrics has contributed to the current market valuation and rating downgrade to Strong Sell. The broader market environment shows mixed signals, with the Sensex recovering from recent losses but still below its 52-week high, and mid-cap stocks outperforming on the day.
Investors analysing Hikal Ltd’s stock should consider the comprehensive financial data and market context that have influenced the share price movement to its current level.
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