Kennametal India Ltd Gains 8.36%: 6 Key Factors Driving the Week’s Volatility

2 February 2026: 52-Week Low Amid Market Fluctuations

Kennametal India Ltd’s share price touched a 52-week low of Rs.1,932.10 on 2 February 2026, reflecting ongoing valuation pressures and market volatility. Despite this low, the stock managed a modest intraday recovery, closing at Rs.1,970.05, up 0.77% for the day. This resilience came against a backdrop of a declining Sensex, which fell 1.03% to 35,814.09. The stock’s position below its medium- and long-term moving averages indicated sustained downward pressure, though short-term support was evident just above the 5-day average.

Over the past year, Kennametal India has underperformed the Sensex, declining 17.01% compared to the benchmark’s 4.52% gain. The company’s valuation metrics, including a high price-to-book ratio of 5.7 and an elevated PEG ratio of 39.2, contributed to investor caution despite moderate profitability metrics such as a 14.6% return on equity.

3 February 2026: Gap-Up Rally and Intraday High Signal Positive Momentum

The following day saw a dramatic reversal, with Kennametal India opening 8.12% higher at Rs.2,130 and closing at Rs.2,201.90, a gain of 11.77%. This gap-up rally was supported by strong buying interest and outperformance relative to both the engineering sector (+3.08%) and the broader market, which experienced a volatile session with the Sensex closing down 2.76%. The stock’s price action above the 5-day and 20-day moving averages suggested short-term bullish momentum, although resistance remained at longer-term averages.

This surge marked the stock’s highest level in recent weeks and reflected a significant shift in market sentiment, possibly driven by company-specific factors or broader sector optimism. Despite this, technical indicators remained mixed, with bearish signals persisting on weekly and monthly charts.

4 February 2026: Price Surge Amid Mixed Technical Signals

On 4 February, Kennametal India’s stock price surged 11.77% to Rs.2,201.90, continuing the strong momentum from the previous day. The intraday range was volatile, with a low of Rs.2,061.55 and a high of Rs.2,248.00. Despite this robust gain, technical indicators presented a complex picture. The overall trend shifted from bearish to mildly bearish, with the MACD and KST oscillators remaining negative on weekly and monthly timeframes.

The Relative Strength Index (RSI) hovered in a neutral zone, while Bollinger Bands showed bullish signals on the weekly scale but bearish tendencies monthly. This divergence suggested a short-term rally within a broader cautious framework. The stock’s valuation also drew attention, with price-to-earnings and price-to-book ratios reaching very expensive levels, raising concerns about sustainability.

5 February 2026: Q3 Results and Bearish Technical Shift

Kennametal India reported its Q3 FY26 results on 5 February, revealing margin pressures despite revenue growth. The stock reacted negatively, closing down 4.04% at Rs.2,112.95. Technical momentum deteriorated further, with key indicators such as MACD and KST turning decisively bearish. Moving averages and Bollinger Bands also signalled increased downside risk, while the Relative Strength Index remained neutral, indicating potential for further declines.

Despite outperforming the Sensex over the past week, the stock’s longer-term returns remained subdued, with a 7.33% decline over the last year compared to the Sensex’s 6.66% gain. The technical deterioration and earnings concerns contributed to a cautious market stance.

6 February 2026: Downgrade to Sell Amid Valuation and Technical Concerns

MarketsMOJO downgraded Kennametal India Ltd from a Hold to a Sell rating on 5 February 2026, citing stretched valuations, subdued financial growth, and mixed to bearish technical indicators. The stock closed at Rs.2,118.30 on 6 February, up 0.90% for the day but still facing a mildly bearish technical outlook. Key momentum oscillators such as MACD and KST remained bearish, while moving averages suggested caution.

The company’s price-to-earnings ratio stood at 42.87, with a price-to-book value of 6.27 and a PEG ratio of 42.87, indicating a significant premium relative to earnings growth. Despite a respectable return on capital employed of 21.59% and return on equity of 14.63%, the stock’s recent underperformance relative to the Sensex and BSE500 index raised concerns about the sustainability of current price levels.

Technical signals pointed to limited upside momentum and potential downside risk, reinforcing the cautious stance. The downgrade reflects a convergence of valuation, technical, and financial factors that temper optimism despite the stock’s long-term growth potential.

Daily Price Performance: Kennametal India Ltd vs Sensex

Key Takeaways

Positive Signals: Kennametal India Ltd’s 8.36% weekly gain notably outpaced the Sensex’s 1.51%, driven by a strong gap-up rally and sustained buying interest on 3 and 4 February. The stock’s operational profitability remains solid, with a 21.59% ROCE and 14.63% ROE, supported by a conservative capital structure with zero debt. Long-term returns over five and ten years remain robust, reflecting the company’s underlying growth potential.

Cautionary Signals: Despite recent gains, the stock’s valuation is stretched, with very high P/E, P/B, and PEG ratios signalling a significant price premium. Technical indicators have shifted from mildly bearish to bearish, with MACD, KST, and moving averages suggesting downside risks. The downgrade to a Sell rating by MarketsMOJO underscores concerns about the sustainability of the rally amid margin pressures and flat recent earnings growth. The stock’s underperformance relative to the Sensex over one and three years further highlights challenges.

Conclusion

Kennametal India Ltd’s week was characterised by sharp price volatility, a strong rebound from a 52-week low, and a complex technical and valuation landscape. While the stock outperformed the broader market and sector peers in the short term, elevated valuation multiples and bearish technical signals temper enthusiasm. The recent downgrade to a Sell rating reflects a cautious reassessment amid margin pressures and subdued earnings growth. Investors should monitor the stock’s ability to sustain momentum above key technical levels and watch for any shifts in valuation or financial performance that could alter the current outlook.

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