Mirza International Ltd Falls 3.68%: 4 Key Factors Driving the Weekly Decline

Feb 9: Quarterly Results Reveal Sharp Profit Decline

Mirza International Ltd reported a significant downturn in its quarterly financial performance for the period ending December 2025. Net sales contracted by 12.9% to ₹118.21 crores compared to the average of the previous four quarters, signalling weakening demand or operational challenges. Operating profitability deteriorated sharply, with the company posting a negative operating profit margin of -1.10%, the lowest in recent history.

The company’s Profit After Tax (PAT) plunged to a loss of ₹7.31 crores, a staggering 427.9% decline relative to the prior four-quarter average. EBITDA also turned negative, registering a loss of ₹1.30 crores. The operating profit to interest coverage ratio fell to -0.69 times, indicating operating profits are insufficient to cover interest expenses, raising concerns about financial sustainability.

Despite these setbacks, Mirza International maintains a low debt-equity ratio of 0.04 times, providing some financial cushion. However, the debtor turnover ratio declined to 4.42 times, suggesting slower collections and potential liquidity pressures. The stock closed at Rs.38.08 on 9 February, up 2.31% on the day, reflecting some investor optimism despite the negative results.

Feb 9: Mixed Technical Signals Indicate Cautious Momentum

On the same day, technical analysis revealed a nuanced momentum shift for Mirza International. The overall trend moved from bullish to mildly bullish, with mixed signals across weekly and monthly indicators. The weekly MACD was mildly bearish, while the monthly MACD remained mildly bullish. RSI readings were neutral, indicating neither overbought nor oversold conditions.

Bollinger Bands showed bearish tendencies on the weekly chart but mild bullishness monthly. Moving averages suggested a gradual upward trend in the short term, while the KST indicator was bearish weekly but bullish monthly. Dow Theory assessments were mildly bullish across both timeframes, and On-Balance Volume (OBV) readings were bullish, signalling volume support for price advances.

Despite a short-term pullback, these mixed technical signals suggest a consolidation phase. The stock traded within a range of Rs.37.11 to Rs.37.99 during the session, closing at Rs.37.30, down 2.74% from the previous close. Investors were advised to monitor support near Rs.37.00 and resistance around Rs.38.50 for directional cues.

Feb 10: Valuation Metrics Signal Elevated Risk

On 10 February, valuation shifts further highlighted the risks facing Mirza International. The company’s price-to-earnings (P/E) ratio plunged to a negative -74.13, reflecting underlying losses and earnings volatility. This negative P/E firmly places the stock in the ‘risky’ category, cautioning investors relying on traditional earnings multiples.

The price-to-book value (P/BV) ratio stood at 0.92, slightly below book value, which can sometimes indicate undervaluation but here aligns with weak profitability. The enterprise value to EBITDA (EV/EBITDA) ratio was elevated at 18.23, higher than many peers in the diversified consumer products sector, underscoring concerns about earnings quality and operational efficiency.

Comparatively, peers such as Liberty Shoes and Khadim India maintain ‘Very Attractive’ valuations with P/E ratios of 36.34 and 23.38 respectively, and EV/EBITDA multiples below 10. Mirza International’s return on capital employed (ROCE) was a mere 0.49%, and return on equity (ROE) was negative at -0.96%, indicating minimal returns and shareholder value erosion.

The stock closed at Rs.38.40 on 10 February, up 3.17% on the day, but the overall risk profile remains elevated. The company’s mojo grade was downgraded to ‘Strong Sell’ on 27 January 2026, reflecting these deteriorating fundamentals and valuation concerns.

Feb 11-13: Continued Downtrend Amid Weak Market Sentiment

Following the valuation update, Mirza International’s stock price continued to decline over the remainder of the week. On 11 February, the stock slipped marginally by 0.11% to Rs.37.32, with the Sensex gaining 0.13%. The following day, 12 February, saw a sharper fall of 1.53% to Rs.36.75, while the Sensex declined 0.56%, reflecting broader market weakness.

On the final trading day, 13 February, the stock dropped 2.45% to close at Rs.35.85, underperforming the Sensex’s 1.40% decline. Trading volumes fluctuated, with a notable low of 4,080 shares on 12 February, indicating subdued investor interest amid the downtrend.

This sustained decline capped a week in which Mirza International lost 3.68%, significantly underperforming the Sensex’s 0.54% fall. The stock’s technical and fundamental challenges, combined with valuation risks, contributed to this negative momentum.

Key Takeaways

Financial Performance: The sharp quarterly decline in net sales and profitability, with a PAT loss of ₹7.31 crores and negative operating margins, signals significant operational challenges. The negative EBITDA and poor interest coverage ratio highlight cash flow and solvency concerns.

Valuation and Risk: The negative P/E ratio of -74.13 and elevated EV/EBITDA of 18.23 place Mirza International in a risky valuation category, contrasting with more attractively valued peers. Weak ROCE and negative ROE further underline the company’s struggle to generate shareholder value.

Technical Indicators: Mixed technical signals with mildly bullish monthly trends but bearish weekly momentum suggest consolidation rather than a clear directional move. Volume trends indicate some accumulation, but caution remains warranted.

Market Performance: The stock’s 3.68% weekly decline significantly underperformed the Sensex’s 0.54% fall, reflecting investor concerns amid deteriorating fundamentals and valuation risks.

Conclusion

Mirza International Ltd’s week was marked by a pronounced deterioration in financial results and valuation metrics, culminating in a 3.68% stock price decline. Despite some mildly bullish longer-term technical signals, the company faces significant operational and profitability challenges, as evidenced by negative earnings and poor returns on capital. The downgrade to a ‘Strong Sell’ mojo grade reflects these heightened risks. Investors should approach the stock with caution, considering the company’s weak fundamentals and elevated valuation risks relative to peers in the diversified consumer products sector.

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