Kanco Tea Falls 10.17%: Downgrade and Weak Fundamentals Weigh on Stock

Feb 15 2026 10:01 AM IST

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Kanco Tea & Industries Ltd experienced a challenging week from 9 to 13 February 2026, with its stock price declining sharply by 10.17% to close at Rs.62.88, significantly underperforming the Sensex which fell by only 0.54%. The week was marked by a downgrade to a 'Strong Sell' rating amid deteriorating fundamentals and technical setbacks, overshadowing a modest seasonal sales surge reported in the quarterly results.

Key Events This Week

Feb 9: Stock opens at Rs.67.04, down 4.23% amid broad market gains

Feb 10: Quarterly results reveal seasonal sales surge but underlying challenges persist

Feb 11: Stock dips further to Rs.66.01 following downgrade announcement

Feb 12: Downgrade to Strong Sell announced, stock falls 3.50%

Feb 13: Week closes at Rs.62.88, down 1.29% on continued weakness

Week Open

Rs.67.04

Week Close

Rs.62.88

-10.17%

Week High

Rs.67.88

Sensex Change

-0.54%

9 February 2026: Stock Opens Lower Despite Sensex Rally

Kanco Tea began the week at Rs.67.04, a decline of 4.23% from the previous Friday’s close of Rs.70.00. This drop contrasted sharply with the Sensex, which gained 1.04% to close at 37,113.23. The stock’s early weakness reflected investor caution ahead of the company’s quarterly results and growing concerns about its underlying fundamentals.

10 February 2026: Quarterly Results Show Seasonal Sales Surge

The company reported a seasonal surge in Q2 FY26 sales, with net sales rising 50.08% to Rs.28.20 crores and profit after tax improving to Rs.6.40 crores over the last six months. Despite these positive figures, the report highlighted persistent structural challenges, including operating losses and weak debt servicing capacity. The stock managed a modest recovery, closing at Rs.67.88, up 1.25% on the day, while the Sensex rose 0.25%.

11 February 2026: Downgrade Announcement Triggers Sharp Decline

On 11 February, MarketsMOJO downgraded Kanco Tea & Industries Ltd from a 'Sell' to a 'Strong Sell' rating, citing deteriorating technical indicators and weak fundamentals. The downgrade was driven by a shift in technical momentum from mildly bullish to sideways, bearish MACD and Bollinger Bands on weekly and monthly charts, and poor valuation metrics. The stock closed at Rs.66.01, down 2.75%, while the Sensex inched up 0.13%.

12 February 2026: Continued Weakness Amid Technical and Fundamental Concerns

The downgrade’s impact deepened on 12 February as the stock fell 3.50% to Rs.63.70, underperforming the Sensex which declined 0.56%. The company’s financial challenges remain significant, with operating losses, a negative EBIT to interest ratio of -0.47, and low return on equity averaging 6.75%. Despite a 85.4% profit growth in the last year, the stock has underperformed the BSE500 index by a wide margin, reflecting investor scepticism.

13 February 2026: Week Ends on a Bearish Note

Kanco Tea closed the week at Rs.62.88, down 1.29% on the day and 10.17% for the week, while the Sensex fell 1.40%. The stock’s 52-week high remains at Rs.93.85, but recent volatility and persistent negative signals have weighed heavily on investor sentiment. The company’s modest sales growth has not alleviated concerns about its operational and financial stability.

Date	Stock Price	Day Change	Sensex	Day Change
2026-02-09	Rs.67.04	-4.23%	37,113.23	+1.04%
2026-02-10	Rs.67.88	+1.25%	37,207.34	+0.25%
2026-02-11	Rs.66.01	-2.75%	37,256.72	+0.13%
2026-02-12	Rs.63.70	-3.50%	37,049.40	-0.56%
2026-02-13	Rs.62.88	-1.29%	36,532.48	-1.40%

Key Takeaways

Negative Technical Momentum: The downgrade to Strong Sell was primarily driven by a shift in technical indicators, including bearish MACD and Bollinger Bands on weekly and monthly charts, signalling a loss of upward momentum and increased downside risk.

Fundamental Weaknesses Persist: Despite a seasonal sales surge and improved PAT, Kanco Tea continues to face operating losses, poor debt servicing ability, and low return on equity, undermining its financial stability.

Valuation and Market Underperformance: The stock’s valuation metrics have deteriorated, trading at risky levels relative to historical averages. It has underperformed the BSE500 and Sensex significantly over multiple time horizons, reflecting investor scepticism.

Volatility and Investor Caution: The stock’s price volatility and persistent negative signals have contributed to a lack of investor confidence, resulting in a 10.17% weekly decline despite a broadly stable market.

Conclusion

Kanco Tea & Industries Ltd’s week was dominated by a sharp decline in share price following a downgrade to Strong Sell by MarketsMOJO, reflecting deteriorating technical and fundamental conditions. While quarterly results showed some improvement in sales and profits, these were insufficient to offset ongoing operational losses and valuation concerns. The stock’s sustained underperformance relative to the Sensex and BSE500 highlights the challenges it faces in regaining investor confidence. Given the elevated risks and negative momentum, the stock remains under pressure as it navigates a difficult market environment.

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