Stock Price and Market Performance
HP Adhesives Ltd’s stock closed just 1.31% above its 52-week low of ₹40.05, signalling a significant erosion in investor confidence over the past year. Despite a slight rebound following four consecutive days of decline, the stock remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical positioning underscores the prevailing bearish sentiment.
On 9 Jan 2026, the stock recorded a day decline of 0.97%, marginally underperforming the Sensex, which fell 0.73% on the same day. Over the last week, HP Adhesives has lost 6.50%, compared to a 2.56% drop in the Sensex. The one-month and three-month performances further illustrate the stock’s struggles, with losses of 5.50% and 14.89% respectively, while the Sensex posted gains of 1.30% and 1.70% over the same periods.
Longer-term figures are more stark: the stock has declined by 48.69% over the past year, in contrast to the Sensex’s 7.66% gain. Over three years, HP Adhesives has lost 47.66%, while the Sensex surged 37.57%. The five- and ten-year returns for the stock stand at 0.00%, indicating no appreciable growth, whereas the Sensex has delivered 71.31% and 235.16% respectively over those periods.
Financial Metrics and Profitability Trends
HP Adhesives’ financial performance has mirrored its share price decline. The company’s operating profit has grown at an annualised rate of just 16.27% over the last five years, a modest pace that has not translated into sustained shareholder value. The latest nine-month profit after tax (PAT) figure of ₹12.21 crore represents a contraction of 20.69% compared to the previous period.
Quarterly earnings per share (EPS) have also reached a low point, with the most recent figure at ₹0.38, the lowest recorded in recent quarters. This decline in profitability has contributed to the stock’s deteriorating valuation and investor sentiment.
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Institutional Investor Participation
Institutional investors have reduced their holdings in HP Adhesives by 1.36% over the previous quarter, now collectively holding a mere 0.02% stake in the company. This decline in institutional participation is notable given these investors’ typically greater resources and analytical capabilities to assess company fundamentals. The reduced institutional interest may reflect concerns about the company’s recent financial trajectory and market positioning.
Valuation and Capital Structure
Despite the challenges, HP Adhesives maintains a low average debt-to-equity ratio of zero, indicating a debt-free capital structure. The company’s return on equity (ROE) stands at 8.7%, which, while modest, contributes to a valuation that is considered very attractive. The stock trades at a price-to-book value of 2, suggesting it is priced at a discount relative to its peers’ historical averages.
However, this valuation has not been sufficient to offset the impact of declining profits, which have fallen by 21.8% over the past year. The combination of shrinking earnings and subdued growth prospects has weighed heavily on the stock’s market performance.
Comparative Performance Within the Sector
HP Adhesives operates within the specialty chemicals sector, which has generally experienced more stable returns. The stock’s underperformance relative to the BSE500 index over one year, three years, and three months highlights its divergence from broader market and sector trends. While the sector has shown resilience, HP Adhesives’ share price and financial results have lagged behind, reflecting company-specific factors.
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Mojo Score and Rating Update
HP Adhesives currently holds a Mojo Score of 40.0, categorised as a Sell rating. This represents a downgrade from its previous Hold rating, effective from 12 Nov 2025. The company’s market capitalisation grade is rated 4, reflecting its relatively modest size within the specialty chemicals sector. The downgrade aligns with the stock’s sustained negative price momentum and financial performance metrics.
Summary of Key Performance Indicators
To summarise, HP Adhesives Ltd’s stock has reached an all-time low amid a backdrop of declining profitability, reduced institutional interest, and underwhelming long-term returns. The stock’s performance has consistently lagged behind the Sensex and sector benchmarks across multiple time frames, including one month, three months, one year, and three years.
The company’s financial indicators, including a low EPS of ₹0.38 in the latest quarter and a negative PAT growth of 20.69% over nine months, further illustrate the pressures on earnings. While the company benefits from a debt-free balance sheet and a reasonable ROE of 8.7%, these factors have not translated into positive market sentiment or share price appreciation.
Investors and market participants will continue to monitor HP Adhesives’ performance within the specialty chemicals sector, noting the recent downgrade and the stock’s position near historic lows.
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