Recent Price Movement and Market Context
On 16 Dec 2025, LGB Forge’s share price touched Rs.7.6, the lowest level recorded in the past year. This follows a three-day consecutive decline, during which the stock has delivered a cumulative return of -13.26%. The day’s performance saw the stock fall by 2.13%, underperforming its sector by 0.76%. Notably, LGB Forge is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a persistent bearish trend.
In contrast, the broader market index, Sensex, experienced a negative session, closing at 84,726.61 points, down 299 points or 0.57%. Despite this, Sensex remains 1.69% below its 52-week high of 86,159.02 and is trading above its 50-day and 200-day moving averages, indicating relative market resilience compared to LGB Forge’s performance.
Long-Term Performance and Valuation Metrics
Over the past year, LGB Forge’s stock has declined by 42.53%, a stark contrast to the Sensex’s positive return of 3.64% during the same period. The stock’s 52-week high was Rs.21.75, highlighting the extent of the price contraction. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index over one, three years, and three months.
From a valuation standpoint, LGB Forge exhibits a Return on Capital Employed (ROCE) averaging 3.13% over the long term, which is considered modest within the industry. The company’s net sales have grown at an annual rate of 6.13% over the past five years, while operating profit has expanded at 8.88% annually. These growth rates suggest limited expansion relative to sector peers.
Debt servicing capacity remains a concern, with a Debt to EBITDA ratio of 4.64 times, indicating a relatively high leverage position. The company’s ROCE for the most recent period stands at 0.5%, accompanied by an Enterprise Value to Capital Employed ratio of 4.9, suggesting a valuation that may be considered elevated relative to its capital efficiency.
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Quarterly Financial Results and Profitability
The company’s latest quarterly results reveal a net loss after tax (PAT) 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 recorded at Rs.-1.11 crore, the lowest in recent quarters. These figures underscore the challenges faced in maintaining profitability in the near term.
Despite the negative returns and subdued profitability, the company’s profits have shown a rise of 90.6% over the past year, indicating some improvement in earnings before the impact of other factors. However, this has not translated into positive stock performance or sustained financial strength.
Sector and Shareholding Overview
LGB Forge operates within the Auto Components & Equipments sector, which has witnessed mixed performance in recent times. The stock’s market capitalisation is graded at a modest level, reflecting its micro-cap status within the sector. Promoters remain the majority shareholders, maintaining significant control over the company’s strategic direction.
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Comparative Market Position and Moving Averages
The stock’s position below all major moving averages contrasts with the Sensex’s bullish stance, where the index trades above its 50-day and 200-day moving averages, with the 50 DMA positioned above the 200 DMA. This divergence highlights the relative weakness of LGB Forge within the broader market context.
While the Sensex remains close to its 52-week high, LGB Forge’s 52-week low of Rs.7.6 marks a significant milestone in its price trajectory, reflecting the cumulative impact of subdued growth, profitability pressures, and leverage concerns.
Summary of Key Financial Indicators
To summarise, LGB Forge’s financial profile is characterised by:
- Annual net sales growth of 6.13% over five years
- Operating profit growth at 8.88% annually over the same period
- Long-term ROCE averaging 3.13%, with recent quarter ROCE at 0.5%
- Debt to EBITDA ratio of 4.64 times, indicating elevated leverage
- Enterprise Value to Capital Employed ratio of 4.9
- Negative PAT of Rs.-0.73 crore in the latest quarter
These metrics provide a comprehensive view of the company’s financial standing amid its recent share price decline.
Market Sentiment and Sectoral Impact
The Auto Components & Equipments sector has experienced varied performance, with some companies maintaining steady growth while others face headwinds. LGB Forge’s recent price action and financial results suggest it is currently navigating a challenging environment relative to its peers and the broader market.
Conclusion
LGB Forge’s fall to a 52-week low of Rs.7.6 reflects a combination of subdued financial growth, profitability pressures, and elevated leverage. The stock’s underperformance relative to the Sensex and its sector peers is evident in both price and fundamental metrics. Trading below all major moving averages, the stock remains in a downtrend, underscoring the challenges faced by the company in the current market environment.
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