Stock Price Movement and Market Context
On 15 Dec 2025, LGB Forge's share price touched Rs.8.13, the lowest level recorded in the past year. This decline follows a two-day consecutive fall, with the stock registering a cumulative return of -6.41% over this period. The day’s performance showed a drop of 6.10%, underperforming its sector by 5.21%. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating sustained downward momentum.
In contrast, the broader market, represented by the Sensex, opened lower at 84,891.75 points, down 0.44% from the previous close, and was trading at 85,044.81 points (-0.26%) during the same session. The Sensex remains close to its 52-week high of 86,159.02, just 1.31% away, supported by bullish moving averages where the 50-day moving average is above the 200-day moving average. Small-cap stocks led the market gains with the BSE Small Cap index rising by 0.08%.
Long-Term Performance and Valuation Metrics
Over the last twelve months, LGB Forge’s stock has delivered a return of -33.46%, significantly lagging behind the Sensex’s 3.53% gain in the same period. The stock’s 52-week high was Rs.21.75, highlighting the extent of the decline to the current low.
Financially, the company’s long-term fundamentals show modest growth. Net sales have expanded at an annual rate of 6.13% over the past five years, while operating profit has grown at 8.88% annually. However, the return on capital employed (ROCE) remains subdued, averaging 3.13%, with the most recent quarterly ROCE reported at 0.5%. This level of capital efficiency is relatively low for the sector.
LGB Forge’s debt servicing capacity is constrained, with a Debt to EBITDA ratio of 4.64 times, indicating a higher leverage position compared to industry norms. The enterprise value to capital employed ratio stands at 5.5, suggesting a valuation that may be considered expensive relative to the company’s capital base. Nevertheless, the stock is trading at a discount compared to the average historical valuations of its peers.
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Recent Quarterly Financials
The company’s latest quarterly results reflect challenges in profitability. The profit after tax (PAT) for the quarter stood at a loss of Rs.-0.73 crore, representing a decline of 251.8% compared to the previous four-quarter average. Profit before tax excluding other income (PBT less OI) was also negative at Rs.-1.11 crore, marking the lowest level in recent quarters.
Despite these figures, the company’s profits over the past year have shown a rise of 90.6%, indicating some improvement in earnings, albeit from a low base. However, this has not translated into positive stock returns or valuation uplift.
Sector and Peer Comparison
LGB Forge operates within the Auto Components & Equipments sector, which has seen mixed performance in recent months. While the broader market indices maintain a positive trajectory, LGB Forge’s stock has underperformed not only the Sensex but also the BSE500 index over the last three years, one year, and three months. This underperformance highlights the stock’s relative weakness within its sector and the wider market.
The company’s promoter group remains the majority shareholder, maintaining significant control over corporate decisions and strategic direction.
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Summary of Key Concerns
The stock’s fall to Rs.8.13 reflects a combination of factors including subdued long-term growth, limited capital efficiency, and elevated leverage. The recent quarterly losses and the stock’s position below all major moving averages underscore the current market sentiment. While the broader market and small-cap indices show resilience, LGB Forge’s performance remains below par relative to its sector and benchmark indices.
Investors and market participants may note the stock’s discount to peer valuations, but the financial metrics suggest caution given the company’s current earnings and capital structure.
Market Outlook and Trading Activity
Trading volumes and price action over recent sessions indicate sustained selling pressure. The stock’s underperformance relative to the sector and the broader market’s modest gains highlight a divergence in investor focus. The Sensex’s proximity to its 52-week high and its bullish moving averages contrast with LGB Forge’s downward trajectory, emphasising the stock’s current challenges within the auto components space.
Conclusion
LGB Forge’s stock reaching a 52-week low of Rs.8.13 marks a notable event in its trading history, reflecting ongoing pressures from financial performance and market dynamics. The company’s long-term growth rates, profitability metrics, and leverage ratios provide context to the stock’s valuation and price movement. While the broader market environment remains relatively stable, LGB Forge’s share price continues to face headwinds amid sectoral and company-specific factors.
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