Stock Price Movement and Market Context
The stock’s latest low of Rs.2.65 was recorded after a period of sustained decline, although it showed a modest gain today, outperforming its sector by 0.53%. Despite this slight uptick, Nandan Denim remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a persistent bearish trend. The broader market context saw the Sensex open flat but then fall by 333 points to 81,887.48, a 0.44% decline, with the index trading below its 50-day moving average.
Comparative Performance Over One Year
Over the last 12 months, Nandan Denim’s stock price has fallen by 21.87%, a stark contrast to the Sensex’s positive return of 9.82% during the same period. This underperformance extends beyond the last year, with the stock lagging behind the BSE500 index over the past three years, one year, and three months, highlighting a prolonged period of subdued investor confidence and market challenges.
Financial Results and Profitability Concerns
The company’s recent quarterly results for December 2025 further underline the difficulties faced. Net sales for the quarter were reported at Rs.499.53 crores, the lowest in recent periods, while profit before depreciation, interest, and taxes (PBDIT) stood at Rs.21.04 crores, also at a nadir. Most notably, the profit after tax (PAT) dropped sharply by 68.6% to Rs.2.97 crores compared to the previous four-quarter average, signalling a significant contraction in profitability.
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Long-Term Financial Metrics and Valuation
Nandan Denim’s long-term financial strength is reflected in its average Return on Capital Employed (ROCE) of 8.35%, which is considered weak relative to industry standards. The company’s ability to service debt is also constrained, with a Debt to EBITDA ratio of 3.02 times, indicating elevated leverage and potential pressure on cash flows. These factors contributed to the recent downgrade of the company’s Mojo Grade from Hold to Strong Sell on 3 November 2025, with a current Mojo Score of 17.0.
Valuation Considerations
Despite the challenges, the stock’s valuation metrics present a contrasting picture. The company’s ROCE of 8.6% is paired with a very attractive Enterprise Value to Capital Employed ratio of 0.7, suggesting that the stock is trading at a discount relative to its capital base. Additionally, Nandan Denim’s valuation is lower than the average historical valuations of its peers in the Garments & Apparels sector, which may reflect market caution given the recent financial performance.
Shareholding and Sector Placement
The majority shareholding remains with the promoters, maintaining a stable ownership structure. Nandan Denim operates within the Garments & Apparels industry and sector, which has experienced mixed performance amid broader market fluctuations. The company’s market capitalisation grade is rated 4, indicating a micro-cap status within the sector.
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Summary of Performance Trends
Over the past year, Nandan Denim has generated a negative return of 21.87%, with profits declining by 31.5%. The stock’s 52-week high was Rs.4.41, underscoring the extent of the recent price erosion. While the stock has shown a minor recovery today after three consecutive days of decline, it remains entrenched in a downward trend, trading well below all major moving averages.
Market and Sector Dynamics
The broader market environment has been challenging, with the Sensex trading below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating some underlying market resilience. Within this context, Nandan Denim’s performance has been notably weaker than the benchmark indices and sector peers, reflecting company-specific financial pressures.
Conclusion
Nandan Denim Ltd’s fall to a 52-week low of Rs.2.65 highlights the ongoing financial and market challenges faced by the company. Weak profitability, elevated leverage, and subdued returns have contributed to the stock’s underperformance relative to the broader market and its sector. While valuation metrics suggest the stock is trading at a discount, the prevailing trend and financial indicators underscore the difficulties the company is currently navigating.
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