Stock Price Movement and Market Context
On the day the new low was recorded, Magadh Sugar & Energy Ltd opened and traded steadily at Rs.413, closing with a day change of -1.08%. This performance notably underperformed the Sugar sector, which gained 2.1% on the same day, resulting in a sector underperformance of -3.18% for the stock. The stock has been declining for two consecutive sessions, registering a cumulative loss of -4.57% over this period.
Further technical indicators show that the stock is trading below all key moving averages — the 5-day, 20-day, 50-day, 100-day, and 200-day averages — signalling sustained downward momentum. In contrast, the broader market index, Sensex, opened lower at 81,947.31 points, down by 619.06 points (-0.75%), and was trading at 82,057.88 points (-0.62%) during the same session. The Sensex itself is below its 50-day moving average, though the 50DMA remains above the 200DMA, indicating mixed market signals.
Long-Term Performance and Valuation Metrics
Over the past year, Magadh Sugar & Energy Ltd has delivered a negative return of -28.25%, significantly lagging behind the Sensex’s positive 6.90% gain. The stock’s 52-week high was Rs.814, highlighting the extent of the decline from its peak. This underperformance extends beyond the last year, with the stock also trailing the BSE500 index over the last three years, one year, and three months.
Despite the recent price weakness, the company’s valuation metrics present a nuanced picture. The return on capital employed (ROCE) stands at 12.9%, which is considered attractive within the sector. Additionally, the enterprise value to capital employed ratio is 0.8, suggesting the stock is trading at a discount relative to its peers’ historical valuations. The current dividend yield is 3%, which is relatively high given the prevailing price level.
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Financial Performance and Profitability Trends
Magadh Sugar & Energy Ltd’s financial results have reflected pressures in recent quarters. The company reported a net loss after tax (PAT) of Rs. -10.35 crores in the quarter ended September 2025, representing a sharp decline of -292.7% compared to the previous period. This negative profitability has contributed to subdued investor confidence.
Operating profit growth over the last five years has been modest, with a compound annual growth rate (CAGR) of 5.22%, while net sales have grown at a slightly higher rate of 5.82% annually. The dividend payout ratio (DPR) is at a low 16.09%, indicating restrained dividend distribution relative to earnings. Interest expenses have increased significantly, with a 29.30% rise over nine months to Rs.33.23 crores, adding to financial costs and pressure on margins.
Shareholding and Market Perception
Despite the company’s size, domestic mutual funds hold a minimal stake of just 0.02%. Given that domestic mutual funds typically conduct detailed research and maintain positions in companies with favourable prospects, this limited holding may reflect a cautious stance towards the stock’s current valuation and business outlook.
In addition to the recent price decline, the stock’s Mojo Score stands at 31.0, with a Mojo Grade of Sell as of 17 Nov 2025, downgraded from a previous Strong Sell rating. The market capitalisation grade is 4, indicating a relatively small market cap within its sector.
Sector and Peer Comparison
The Sugar sector has shown resilience with a 2.1% gain on the day Magadh Sugar & Energy Ltd hit its 52-week low. This divergence highlights the stock’s relative weakness within its industry. While the company’s valuation metrics suggest it is trading at a discount compared to peers, its recent profit decline of -19.6% over the past year contrasts with the sector’s overall performance.
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Summary of Key Concerns
The stock’s fall to Rs.413 marks a significant low point in its recent trading history, reflecting a combination of subdued financial results, rising interest costs, and limited institutional support. The negative quarterly PAT and low dividend payout ratio further underscore the challenges faced by the company. While valuation metrics indicate a discount relative to peers, the stock’s performance over the past year and longer term has been below benchmark indices and sector averages.
Magadh Sugar & Energy Ltd’s current market dynamics illustrate the complexities faced by companies in the Sugar sector amid fluctuating profitability and competitive pressures. The stock’s technical indicators and fundamental data collectively highlight the factors contributing to its recent decline and 52-week low.
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