Meghmani Organics Ltd Hits All-Time Low Amid Prolonged Downtrend

Recent Price Performance and Market Context

The stock fell by 2.09% on 19 Feb 2026, underperforming the Sensex which declined by 1.13% on the same day. Over the past week, Meghmani Organics has lost 6.66%, compared to a modest 1.06% drop in the Sensex. The one-month performance shows a sharper decline of 12.31%, while the three-month return stands at -25.33%, significantly lagging the Sensex’s 2.82% fall. Year-to-date, the stock has dropped 19.10%, whereas the Sensex has declined by only 2.85%.

Over the last year, Meghmani Organics has delivered a negative return of 27.76%, contrasting with the Sensex’s positive 9.02% gain. The three-year and five-year performances reveal a stark underperformance, with the stock down 47.49% over three years and flat over five years, while the Sensex surged 35.71% and 62.68% respectively. The ten-year performance remains unchanged at 0.00%, against the Sensex’s impressive 249.18% rise.

The stock is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – signalling a persistent bearish trend. It has also underperformed its sector by 1.25% on the latest trading day.

Financial Metrics and Profitability Analysis

Meghmani Organics’ financial indicators reflect ongoing difficulties. The company’s operating profits have declined at a compound annual growth rate (CAGR) of -17.31% over the past five years, indicating weakening earnings capacity. The average EBIT to interest ratio stands at a negative -5.58, highlighting challenges in covering interest expenses from operating earnings. The quarterly operating profit to interest ratio is at a low 2.08 times, underscoring tight debt servicing ability.

Profit after tax (PAT) for the latest quarter was reported at a loss of ₹3.53 crore, representing a steep fall of 135.6% compared to the previous four-quarter average. Interest expenses for the nine-month period have increased by 22.18% to ₹71.38 crore, further pressuring profitability.

The company’s average return on equity (ROE) is 6.03%, signalling modest profitability relative to shareholders’ funds. Return on capital employed (ROCE) is at 4.6%, which, while low, contributes to an attractive valuation metric with an enterprise value to capital employed ratio of 0.9.

Shareholding and Market Perception

Despite its size, Meghmani Organics has no holdings from domestic mutual funds, which often conduct detailed research and hold stakes in companies they find favourable. This absence may reflect a cautious stance by institutional investors regarding the company’s current valuation or business outlook.

The stock’s Mojo Score is 14.0, with a Mojo Grade of Strong Sell as of 1 Jan 2026, downgraded from Sell. The market capitalisation grade is 3, indicating a relatively small market cap within its sector. These ratings reflect the company’s ongoing underperformance and financial strain.

Meghmani Organics has consistently underperformed the BSE500 index over the past three years, with negative returns in each of the last three annual periods. This trend highlights the stock’s relative weakness compared to broader market indices and sector peers.

Valuation and Profit Growth Discrepancies

While the stock price has declined sharply, the company’s profits have shown a notable increase of 183.8% over the past year. This divergence results in a low price-to-earnings growth (PEG) ratio of 0.2, suggesting that the market is valuing the company at a significant discount relative to its profit growth.

Despite this, the stock’s valuation remains below the average historical valuations of its peers, reflecting market caution. The enterprise value to capital employed ratio of 0.9 further indicates that the stock is trading at an attractive valuation level relative to the capital invested in the business.

However, the persistent negative returns and weak financial ratios continue to weigh on the stock’s performance and investor sentiment.

Summary of Key Performance Indicators

Meghmani Organics Ltd’s key metrics as of early 2026 include:

• Mojo Score: 14.0 (Strong Sell, downgraded from Sell on 1 Jan 2026)
• Market Cap Grade: 3
• Operating Profit CAGR (5 years): -17.31%
• Average EBIT to Interest Ratio: -5.58
• Return on Equity (avg): 6.03%
• Return on Capital Employed: 4.6%
• Profit After Tax (latest quarter): -₹3.53 crore (-135.6% vs previous 4Q average)
• Interest Expense (9 months): ₹71.38 crore (+22.18%)
• Operating Profit to Interest (quarterly): 2.08 times
• Stock price near 52-week low: ₹52.2 (0.1% away)
• Year-to-date stock return: -19.10%
• One-year stock return: -27.76%
• Three-year stock return: -47.49%

These figures illustrate the company’s ongoing difficulties in maintaining profitability and market valuation, despite some recent profit growth.

Sector and Benchmark Comparison

Meghmani Organics operates within the Pesticides & Agrochemicals sector, which has seen varied performance across its constituents. The stock’s consistent underperformance relative to the Sensex and BSE500 indices over multiple periods highlights its relative weakness within the broader market context.

The sector’s average historical valuations exceed those of Meghmani Organics, indicating that the stock is trading at a discount compared to its peers. This valuation gap reflects the market’s assessment of the company’s financial health and growth prospects.

Conclusion

Meghmani Organics Ltd’s stock has reached an all-time low amid a prolonged period of negative returns and subdued financial performance. The company’s declining operating profits, increased interest expenses, and modest returns on equity and capital employed contribute to its current market position. Despite a recent surge in profits, the stock continues to trade at a discount relative to its peers and benchmarks, reflecting ongoing challenges in the business environment and investor sentiment.

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