Stock Price Movement and Market Context
On the day in question, Mercury EV-Tech’s share price fell by 1.94%, aligning with the sector’s decline of 2.11%. This drop extended a two-day losing streak, during which the stock has lost 2.68% cumulatively. The current price of Rs.35.75 marks a significant fall from its 52-week high of Rs.93.01, representing a decline of approximately 61.6% over the period.
The stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. This technical positioning suggests that the stock remains under pressure relative to its recent trading history.
Broader market conditions have also been challenging. The Nifty index closed at 25,876.85, down 263.9 points or 1.01%, and remains 1.92% below its 52-week high of 26,373.20. The index is trading below its 50-day moving average, although the 50-day average remains above the 200-day average, indicating some underlying resilience. Large-cap segments, including the Nifty Next 50, have been significant contributors to the market’s decline, with the latter down 2.11%.
Performance Relative to Benchmarks
Mercury EV-Tech’s one-year performance starkly contrasts with broader market indices. The stock has delivered a negative return of 60.09% over the last 12 months, while the Sensex has gained 7.72% and the BSE500 index has risen by 6.23%. This divergence highlights the stock’s underperformance within the automobile sector and the wider market.
The company’s Mojo Score currently stands at 36.0, with a Mojo Grade of Sell, downgraded from Hold on 20 May 2025. The Market Cap Grade is rated 4, reflecting the company’s mid-tier market capitalisation status. These metrics underscore the cautious stance reflected in the stock’s valuation and market sentiment.
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Valuation and Financial Metrics
Mercury EV-Tech’s valuation metrics present a complex picture. The company’s return on equity (ROE) stands at 3.1%, which is modest relative to industry standards. The price-to-book (P/B) ratio is 2.5, indicating a valuation considered expensive when compared to peers’ historical averages. Despite this, the stock is trading at a discount relative to its peer group’s average valuations, reflecting market caution.
Over the past year, the company’s profits have increased substantially by 209.5%, resulting in a price/earnings to growth (PEG) ratio of 0.4. This suggests that earnings growth has outpaced the stock price decline, although this has not translated into positive returns for shareholders.
Domestic mutual funds hold no stake in Mercury EV-Tech, a notable factor given their capacity for detailed company research. This absence may indicate a lack of conviction in the stock’s current price or business outlook among institutional investors.
Operational and Sales Performance
Despite the stock’s price decline, Mercury EV-Tech has demonstrated healthy long-term growth in its core business. Net sales have expanded at an annual rate of 125.97%, while operating profit has grown by 70.01%. The company has reported positive results for five consecutive quarters, signalling consistent profitability.
In the nine months ending recently, the company’s profit after tax (PAT) reached Rs.4.54 crore, reflecting a growth rate of 95.69%. Quarterly net sales stood at Rs.34.01 crore, up 25.6% compared to the previous four-quarter average. These figures indicate operational progress despite the stock’s market performance.
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Sector and Market Influences
The automobile sector, in which Mercury EV-Tech operates, has experienced a general decline, with sector trading down 2.11% on the day. This broader weakness has contributed to the stock’s recent price movements. The company’s performance relative to sector peers and market indices highlights the challenges faced in maintaining investor confidence amid a competitive and evolving industry landscape.
While the Nifty index remains close to its 52-week high, the stock’s significant underperformance relative to the market and sector benchmarks emphasises the divergence in investor sentiment and valuation assessments.
Summary of Key Metrics
To summarise, Mercury EV-Tech Ltd’s stock has reached a 52-week low of Rs.35.75, down from a high of Rs.93.01 within the last year. The stock’s Mojo Grade was downgraded to Sell in May 2025, reflecting concerns over valuation and market positioning. Despite strong growth in net sales and profits, the stock has underperformed the Sensex and BSE500 indices significantly.
The company’s financial ratios, including a modest ROE and a relatively high P/B ratio, alongside the absence of domestic mutual fund holdings, provide context for the cautious market stance. The stock’s trading below all major moving averages further underscores the current downward trend.
Overall, Mercury EV-Tech Ltd’s recent price action and financial metrics illustrate a complex interplay of growth achievements and market valuation pressures within a challenging sector environment.
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