Indo National Ltd Stock Falls to 52-Week Low of Rs.388

Intraday Price Movement and Market Context

On the day, Indo National Ltd’s stock touched an intraday low of Rs.388, representing a 5.94% drop from previous levels and closing with a day change of -3.03%. This decline notably outpaced the FMCG sector’s performance, with the stock underperforming the sector by 4.54%. The stock is currently trading 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 market showed relative resilience. The Sensex opened lower at 85,640.05, down 121.96 points (-0.14%), and was trading marginally down by 0.08% at 85,697.48 during the session. The Sensex remains close to its 52-week high of 86,159.02, just 0.54% away, supported by a bullish trend with the 50-day moving average above the 200-day moving average. Mid-cap stocks led the market gains, with the BSE Mid Cap index rising by 0.06%.

Performance Over the Past Year

Indo National Ltd’s stock has experienced a significant decline over the past year, with a total return of -30.43%, contrasting sharply with the Sensex’s positive return of 8.16% over the same period. The stock’s 52-week high was Rs.589, indicating a substantial drop of nearly 34% from that peak to the current 52-week low.

Fundamental and Financial Metrics

The company’s long-term fundamentals have shown considerable weakness. Over the last five years, Indo National Ltd’s operating profits have declined at a compounded annual growth rate (CAGR) of -182.78%, indicating a steep erosion in core earnings capacity. This deterioration is reflected in the company’s profitability ratios, with an average Return on Equity (ROE) of just 8.44%, signalling limited returns generated on shareholders’ funds.

Debt servicing capability remains a concern, with the company’s average EBIT to interest ratio standing at -0.89, highlighting challenges in covering interest expenses from operating earnings. The company’s Return on Capital Employed (ROCE) for the half-year period is also negative at -2.27%, underscoring inefficiencies in capital utilisation.

Recent Earnings and Cash Flow Trends

Indo National Ltd has reported negative results for four consecutive quarters, with the latest six-month Profit After Tax (PAT) at Rs.2.15 crore, reflecting a decline of -98.42%. Operating cash flow for the year is deeply negative at Rs.-53.16 crore, indicating cash outflows from core business activities. The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) remain in negative territory, contributing to the stock’s classification as risky relative to its historical valuation levels.

Relative Valuation and Market Position

The stock’s valuation has come under pressure, trading below its historical averages and underperforming the BSE500 index over multiple time frames including the last three years, one year, and three months. This underperformance is consistent with the company’s financial challenges and subdued growth prospects within the FMCG sector.

Shareholding and Corporate Structure

Promoters remain the majority shareholders of Indo National Ltd, maintaining significant control over the company’s strategic direction. The company operates within the FMCG industry and sector, which has generally shown resilience, but Indo National Ltd’s individual performance has lagged behind sector peers.

Summary of Key Metrics

To summarise, Indo National Ltd’s stock has reached a new 52-week low of Rs.388 amid a backdrop of declining profitability, negative cash flows, and weak debt servicing ability. The company’s Moody’s Mojo Score currently stands at 3.0 with a Mojo Grade of Strong Sell, upgraded from Sell on 2 Sep 2024. Market capitalisation grading is at 4, reflecting the company’s relative size and valuation challenges.

The stock’s recent price action and fundamental indicators highlight ongoing pressures, with the share price trading well below all major moving averages and significantly underperforming both its sector and the broader market indices.

Market and Sector Comparison

While the FMCG sector has generally maintained stability, Indo National Ltd’s performance contrasts with the sector’s relative strength. The Sensex’s proximity to its 52-week high and the mid-cap segment’s modest gains underscore the stock’s divergence from broader market trends.

Conclusion

Indo National Ltd’s stock decline to Rs.388 marks a critical point in its price history, reflecting a combination of subdued financial results, valuation pressures, and market underperformance. The company’s financial metrics and recent earnings trajectory provide context for the stock’s current standing within the FMCG sector and the wider market environment.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year (MRP = Rs. 34,999) Start Saving Now →