Hikal Ltd Stock Falls to 52-Week Low of Rs.202 Amidst Continued Downtrend

Stock Price Movement and Market Context

On the day, Hikal Ltd’s stock touched an intraday low of Rs.202, representing a 2.81% decline from the previous close. The stock has been on a losing streak for two consecutive sessions, cumulatively falling by 3.39% during this period. This decline outpaced the Pharmaceuticals & Biotechnology sector’s underperformance, with Hikal lagging by an additional 1.64% relative to its peers.

Hikal’s current price is substantially below its 52-week high of Rs.456.60, underscoring the extent of the correction over the past year. The stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a sustained bearish trend.

The broader market environment has also been challenging. The Sensex opened 385.82 points lower and closed down by 288.88 points at 81,505.77, a decline of 0.82%. The index is trading below its 50-day moving average, although the 50-day average remains above the 200-day average. Notably, the Sensex has recorded a three-week consecutive fall, losing 4.96% in this period, which adds to the negative sentiment impacting stocks like Hikal.

Financial Performance and Fundamental Indicators

Hikal Ltd’s financial results have reflected considerable strain. The company reported a sharp decline in earnings per share (EPS), with a fall of 320.54% in the September 2025 quarter. This was accompanied by negative net profits for two consecutive quarters, highlighting ongoing difficulties in profitability.

Quarterly net sales stood at Rs.318.50 crore, down 30.5% compared to the average of the previous four quarters. The net loss after tax (PAT) was Rs.-34.90 crore, a significant deterioration of 320.5% relative to the prior four-quarter average. Return on capital employed (ROCE) for the half-year was recorded at a low 4.44%, indicating subdued efficiency in generating returns from capital investments.

Over the last five years, the company’s operating profits have contracted at a compound annual growth rate (CAGR) of -16.24%, reflecting weakening long-term earnings power. The average return on equity (ROE) is modest at 8.00%, signalling limited profitability relative to shareholders’ funds. Additionally, the company’s debt servicing capacity is constrained, with a high Debt to EBITDA ratio of 2.51 times, pointing to elevated leverage risks.

Comparative Performance and Valuation Metrics

Hikal Ltd’s stock has delivered a negative return of 45.60% over the past year, markedly underperforming the Sensex, which gained 7.47% during the same period. The stock’s performance has also lagged behind the BSE500 index over the last three years, one year, and three months, indicating persistent underperformance relative to broader market benchmarks.

Despite these challenges, the stock’s valuation metrics suggest it is trading at a discount compared to its peers. The company’s ROCE of 4.1% is low but corresponds with an attractive enterprise value to capital employed ratio of 1.7, which is below average for the sector. This valuation gap reflects the market’s cautious stance given the company’s recent financial results and growth trajectory.

Profitability has also been under pressure, with profits declining by 86.2% over the past year, further compounding concerns about the company’s earnings quality and sustainability.

Shareholding and Market Sentiment

The majority shareholding in Hikal Ltd remains with the promoters, who continue to hold a controlling stake. The company’s Mojo Score 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 mid-cap status within the Pharmaceuticals & Biotechnology sector.

Summary of Key Financial and Market Indicators

To summarise, Hikal Ltd’s stock has reached a new 52-week low of Rs.202 amid a backdrop of declining sales, negative earnings, and subdued returns on capital. The company’s financial metrics reveal a contraction in operating profits, elevated leverage, and limited profitability, which have contributed to the stock’s underperformance relative to the sector and broader market indices.

The stock’s valuation remains discounted compared to peers, reflecting the market’s cautious assessment of the company’s near-term prospects. The broader market environment, characterised by a weakening Sensex and sectoral pressures, has also weighed on the stock’s performance.

Investors and market participants will continue to monitor Hikal Ltd’s financial disclosures and market developments closely as the company navigates these challenges.

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