Stock Performance and Market Context
On the day, Modi Naturals recorded an intraday low of Rs.297.8, representing a sharp fall of 10.49% from previous levels. The stock has been on a downward trajectory for three consecutive sessions, cumulatively losing 14.11% in returns over this period. This decline notably outpaced the sector’s fall, with the Solvent Extraction segment dropping by 3.2% on the same day. The stock underperformed its sector by 7.14% today, reflecting heightened selling pressure.
Despite the broader market’s positive momentum, with the Sensex rebounding strongly by 1,110.78 points (1.17%) to trade at 81,666.46 after a negative start, Modi Naturals did not participate in this recovery. The Sensex’s 50-day moving average remains above its 200-day moving average, signalling a generally bullish market environment, yet Modi Naturals is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring its current weakness relative to market trends.
Financial Metrics and Valuation Concerns
Modi Naturals’ financial profile reveals several factors contributing to its subdued market performance. The company’s Return on Capital Employed (ROCE) stands at a modest 9.64%, indicating limited profitability relative to the capital invested. This figure is a key metric for assessing management efficiency and the ability to generate returns from equity and debt.
Debt servicing capacity remains a concern, with a high Debt to EBITDA ratio of 13.03 times. This elevated leverage ratio suggests that the company faces challenges in comfortably meeting its debt obligations from operating earnings, which may weigh on investor sentiment.
Over the past year, Modi Naturals has underperformed significantly, delivering a negative return of 24.99%, in stark contrast to the Sensex’s positive 5.37% gain over the same period. The stock’s 52-week high was Rs.609.9, highlighting the extent of the decline from its peak.
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Recent Operational and Profitability Trends
Despite the recent price weakness, Modi Naturals has demonstrated healthy long-term growth in operating profit, which has expanded at an annual rate of 78.09%. The company has reported positive results for seven consecutive quarters, signalling consistent earnings generation.
In the latest six-month period, the company’s Profit After Tax (PAT) stood at Rs.20.56 crores, reflecting a growth rate of 36.70%. The half-year ROCE improved to 19.14%, indicating enhanced capital efficiency in recent months. Additionally, cash and cash equivalents reached a peak of Rs.5.99 crores, providing some liquidity cushion.
Valuation metrics suggest the stock is trading at a discount relative to its peers’ historical averages. With a ROCE of 19 and an enterprise value to capital employed ratio of 2, the company’s valuation appears attractive on a relative basis. The Price/Earnings to Growth (PEG) ratio is notably low at 0.1, reflecting the disconnect between rising profits and share price performance.
Shareholding and Market Grade
The majority shareholding remains with the promoters, maintaining control over the company’s strategic direction. Modi Naturals currently holds a Mojo Score of 46.0 and a Mojo Grade of Sell, downgraded from Hold on 21 Jan 2026. The Market Cap Grade is rated 4, indicating a mid-tier market capitalisation relative to peers.
On 2 Feb 2026, the stock recorded a day change of -2.95%, further reflecting the ongoing pressure on the share price.
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Sectoral and Market Dynamics
The Other Agricultural Products sector, within which Modi Naturals operates, has experienced moderate declines, with the Solvent Extraction segment falling by 3.2% on the day. This sectoral weakness contrasts with the broader market’s positive performance, where mega-cap stocks led the Sensex’s 1.17% gain.
Modi Naturals’ trading below all major moving averages indicates a technical downtrend that has persisted despite the overall market recovery. This divergence highlights the stock’s relative underperformance and the challenges it faces in regaining investor confidence.
Summary of Key Metrics
To summarise, Modi Naturals Ltd’s stock has declined to Rs.297.8, its lowest level in 52 weeks, following a series of price drops and underperformance relative to both its sector and the broader market. The company’s financial indicators reveal modest returns on capital and elevated leverage, which have contributed to the cautious market stance. However, recent improvements in profitability and cash reserves provide a nuanced view of the company’s current standing.
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