Recent Price Movement and Market Context
On the day the new low was recorded, Nandan Denim’s stock price fell by 0.69%, underperforming the Garments & Apparels sector by 1.3%. This decline extends a three-day losing streak during which the stock has shed approximately 4.98% of its value. The current price of Rs.2.85 is substantially below its 52-week high of Rs.5.18, representing a decline of 45.0% over the past year.
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. In contrast, the broader Sensex index opened lower by 94.55 points and was trading at 84,600.50, down 0.11%, but remains within 1.84% of its 52-week high of 86,159.02. The Sensex’s 50-day moving average remains above its 200-day average, indicating a more stable market environment compared to the stock’s performance.
Financial Performance and Fundamental Indicators
Nandan Denim’s financial results over recent quarters have shown signs of strain. The company’s net sales for the latest quarter stood at Rs.784.69 crores, reflecting a 19.0% decline compared to the average of the previous four quarters. Profit after tax (PAT) for the nine-month period was Rs.31.26 crores, down 27.94% year-on-year. Operating cash flow for the year was reported at Rs.95.07 crores, marking the lowest level in recent periods.
Long-term financial strength remains subdued, with an average Return on Capital Employed (ROCE) of 8.35%, which is modest relative to industry standards. The company’s ability to service debt is constrained, as indicated by a Debt to EBITDA ratio of 3.02 times, suggesting elevated leverage and potential pressure on cash flows.
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Shareholder Participation and Market Sentiment
Institutional investors have reduced their holdings in Nandan Denim by 0.66% over the previous quarter, now collectively holding just 2% of the company’s shares. This decline in institutional participation may reflect cautious sentiment given the company’s recent financial trends and valuation metrics.
Over the past year, the stock has generated a negative return of 40.90%, significantly underperforming the Sensex’s positive 8.14% return. The stock has also lagged behind the BSE500 index over the last three years, one year, and three months, indicating persistent underperformance relative to broader market benchmarks.
Valuation and Comparative Metrics
Despite the challenges, Nandan Denim’s valuation metrics suggest a degree of attractiveness. The company’s ROCE of 8.6% is accompanied by a low Enterprise Value to Capital Employed ratio of 0.7, indicating that the stock is trading at a discount relative to its capital base. This valuation is lower than the average historical valuations of its peers within the Garments & Apparels sector.
However, profitability has declined by 26.3% over the past year, underscoring the pressures on earnings despite the valuation discount. The combination of subdued profitability and leverage concerns continues to weigh on the stock’s performance.
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Mojo Score and Analyst Grading
Nandan Denim currently holds a Mojo Score of 17.0, categorised as a Strong Sell. This represents a downgrade from its previous Hold rating as of 3 Nov 2025. The downgrade reflects deteriorating fundamentals and market performance. The company’s Market Cap Grade stands at 4, indicating a relatively modest market capitalisation within its sector.
The Strong Sell grade is driven by weak long-term fundamental strength, low returns on capital, and a high debt burden relative to earnings before interest, taxes, depreciation and amortisation (EBITDA). These factors contribute to the cautious stance reflected in the stock’s recent price action.
Summary of Key Metrics
To summarise, Nandan Denim Ltd’s stock has reached a new 52-week low of Rs.2.85, continuing a downward trend amid subdued financial results and reduced institutional interest. The stock’s one-year return of -40.90% contrasts sharply with the Sensex’s positive 8.14% performance. Profitability and sales have declined significantly, while leverage remains elevated. Valuation metrics indicate a discount relative to peers, but this has not translated into price support given the broader challenges.
Market conditions for the Garments & Apparels sector remain mixed, with Nandan Denim’s performance lagging both sector and market indices. The stock’s trading below all major moving averages further underscores the prevailing negative momentum.
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