Mukka Proteins Ltd Falls to 52-Week Low Amidst Continued Downtrend

Stock Performance and Market Context

On the day the new low was recorded, Mukka Proteins Ltd’s stock price fell by 1.00%, underperforming the FMCG sector by 1.45%. This decline extended a three-day losing streak, during which the stock has delivered a cumulative return of -1.8%. The current price of Rs.21.85 is substantially below its 52-week high of Rs.41.08, representing a decline of nearly 47% from that peak.

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 bearish momentum. This technical positioning highlights the challenges the company faces in regaining investor confidence and price stability.

Meanwhile, the broader market environment has also been subdued. The Sensex opened flat but ended the day down by 480.02 points, or 0.67%, closing at 83,014.47. The index is currently 3.79% below its 52-week high of 86,159.02 and has experienced a three-week consecutive decline, losing 3.2% over that period. Although the Sensex trades below its 50-day moving average, the 50DMA remains above the 200DMA, indicating some underlying market resilience despite recent weakness.

Financial Performance and Profitability Concerns

Mukka Proteins Ltd’s financial indicators reveal several areas of concern. The company’s average Return on Capital Employed (ROCE) stands at 9.16%, a figure that suggests limited profitability relative to the capital invested. This low ROCE reflects challenges in generating adequate returns from both equity and debt financing.

Debt servicing capacity is another critical issue. The company’s Debt to EBITDA ratio is elevated at 5.26 times, indicating a high leverage position and potential strain in meeting interest and principal obligations. This is further underscored by the company’s interest expense, which reached a quarterly high of Rs.12.82 crores.

Net sales growth has been modest, with an annualised rate of 8.60% over the past five years, which may be insufficient to support robust long-term expansion. Additionally, the company has reported negative results for seven consecutive quarters, with Profit Before Tax excluding other income (PBT less OI) falling by 67.9% to Rs.3.28 crores compared to the previous four-quarter average. Net profit after tax (PAT) also declined by 45.9% to Rs.5.88 crores in the same comparison.

Investor Participation and Market Sentiment

Institutional investor participation has diminished, with a reduction of 0.6% in their stake over the previous quarter. Currently, institutional investors hold 3.36% of the company’s shares. Given their typically rigorous fundamental analysis capabilities, this decline may reflect concerns about the company’s financial health and growth prospects.

The stock’s performance over the past year has been notably weak, delivering a return of -41.87%, in stark contrast to the Sensex’s positive 8.40% return over the same period. This underperformance extends to longer timeframes as well, with the stock lagging the BSE500 index over the last three years, one year, and three months.

Valuation and Growth Metrics

Despite the challenges, Mukka Proteins Ltd exhibits some positive attributes. Operating profit has grown at an annualised rate of 50.86%, indicating pockets of operational improvement. The company’s valuation metrics also suggest an attractive entry point, with an Enterprise Value to Capital Employed ratio of 1.2, which is below the average historical valuations of its peers in the FMCG sector.

However, this valuation attractiveness is tempered by the decline in profits, which have fallen by 34% over the past year. The juxtaposition of healthy operating profit growth against declining net profitability highlights the complexity of the company’s financial position.

Summary of Key Metrics

Mukka Proteins Ltd’s Mojo Score currently stands at 31.0, with a Mojo Grade of Sell, upgraded from a previous Strong Sell rating on 14 Nov 2025. The company’s market capitalisation grade is 4, reflecting its micro-cap status within the FMCG sector.

The stock’s recent price action and financial results underscore the challenges faced by the company in maintaining profitability and managing leverage. While certain operational metrics such as operating profit growth show promise, the overall financial health remains under pressure, as evidenced by declining net profits and elevated debt servicing ratios.

In the context of a broader market that has also experienced recent weakness, Mukka Proteins Ltd’s stock performance highlights the difficulties encountered by smaller FMCG companies in sustaining growth and investor confidence amid competitive and economic headwinds.

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