Stock Price Movement and Market Context
On 30 Jan 2026, Karma Energy Ltd opened the trading session with a gap down of -6.14%, immediately touching its intraday low and closing at Rs.35.32. This price represents the lowest level the stock has traded at in the past 52 weeks, a stark contrast to its 52-week high of Rs.88. The stock has now recorded losses for two consecutive days, accumulating a decline of -10.26% over this period. Furthermore, it underperformed its sector by -5.73% on the day, signalling relative weakness within the power industry segment.
The stock’s current trading levels are below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, underscoring a sustained bearish trend. This technical positioning suggests limited short-term momentum and a lack of immediate support from typical price indicators.
Meanwhile, the broader market environment presents a mixed picture. The Sensex opened lower at 81,947.31, down by 619.06 points (-0.75%), and was trading at 82,211.70 (-0.43%) during the session. Despite this, the Sensex remains within 4.8% of its 52-week high of 86,159.02, indicating relative resilience in the benchmark index compared to Karma Energy’s underperformance.
Financial Performance and Profitability Concerns
Karma Energy Ltd’s financial fundamentals have been under pressure, contributing to the stock’s subdued performance. The company’s operating profits have contracted at a compound annual growth rate (CAGR) of -26.72% over the last five years, reflecting challenges in sustaining growth. This weak long-term profitability trend is further highlighted by the company’s average Return on Equity (ROE) of just 2.42%, indicating limited efficiency in generating returns from shareholders’ funds.
Additionally, the company’s ability to service its debt remains constrained, with an average EBIT to interest ratio of -1.14. This negative ratio points to earnings before interest and tax being insufficient to cover interest expenses, raising concerns about financial stability and leverage management.
Recent results for the six months ended September 2025 showed a decline in profit after tax (PAT) to Rs.1.11 crore, representing a contraction of -54.08%. This decline in net profitability adds to the challenges faced by the company in improving its earnings profile.
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Valuation and Risk Metrics
The stock’s valuation metrics also reflect elevated risk. Despite the stock generating a negative return of -42.16% over the past year, the company’s profits have increased by 32% during the same period. This disparity results in a price/earnings to growth (PEG) ratio of 39.5, signalling a disconnect between earnings growth and market valuation. Such a high PEG ratio typically indicates that the stock is trading at a premium relative to its earnings growth, which may not be justified given the company’s broader financial challenges.
Moreover, Karma Energy Ltd’s performance has been below par not only in the recent year but also over longer time horizons. The stock has underperformed the BSE500 index over the last three years, one year, and three months, highlighting persistent relative weakness in comparison to a broad market benchmark.
Shareholding and Market Capitalisation
The company’s majority shareholding remains with promoters, which can influence strategic decisions and capital allocation. Karma Energy Ltd currently holds a Market Cap Grade of 4, reflecting its size and market capitalisation relative to peers. The company’s Mojo Score stands at 12.0, with a Mojo Grade of Strong Sell as of 1 August 2025, an upgrade from the previous Sell rating. This grading reflects the assessment of the company’s financial health, valuation, and market performance.
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Summary of Recent Price Action and Market Position
The recent decline to Rs.35.32 marks a critical low point for Karma Energy Ltd, reflecting ongoing challenges in both market sentiment and company fundamentals. The stock’s failure to hold above key moving averages and its underperformance relative to the Sensex and sector peers underscore the difficulties faced by the company in regaining investor confidence.
While the broader market has shown resilience, with the Sensex trading near its 52-week high and maintaining a positive trend above its 200-day moving average, Karma Energy Ltd’s share price trajectory remains subdued. The stock’s current valuation and financial metrics suggest that it is navigating a period of heightened risk and subdued growth prospects.
Investors and market participants will continue to monitor the company’s financial disclosures and market developments closely, given the stock’s recent performance and the challenges highlighted by its financial ratios and earnings trends.
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