National Peroxide Ltd Falls to 52-Week Low of Rs.395 Amidst Weak Financial Metrics

Stock Price Movement and Market Context

On the day the new low was recorded, National Peroxide Ltd’s stock underperformed its sector by 0.93%, closing with a day change of -1.77%. The stock has been on a losing streak for two consecutive sessions, delivering a cumulative return of -0.17% over this period. Notably, the share price 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 comparison, the broader market benchmark, the Sensex, opened lower at 81,947.31 points, down 619.06 points (-0.75%), and was trading at 82,039.49 points (-0.64%) during the same period. The Sensex itself is positioned below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating mixed technical signals for the broader market environment.

Long-Term Performance and Valuation Trends

Over the past year, National Peroxide Ltd’s stock has delivered a negative return of -44.70%, significantly underperforming the Sensex’s positive 6.91% gain. The stock’s 52-week high was Rs.770, underscoring the extent of the decline from its peak to the current low of Rs.395. This steep fall highlights the challenges faced by the company in maintaining investor confidence and market valuation.

Valuation metrics further illustrate the stock’s risk profile. The company’s long-term fundamental strength is weak, with a compounded annual growth rate (CAGR) of operating profits at -135.58% over the last five years. This negative growth trajectory has contributed to the stock’s downgrade to a Mojo Grade of Strong Sell as of 7 May 2025, an adjustment from its previous Sell rating.

Profitability and Debt Servicing Concerns

National Peroxide Ltd’s ability to service its debt remains constrained, with an average EBIT to interest coverage ratio of just 0.14. This low ratio indicates that earnings before interest and tax are insufficient to comfortably cover interest expenses, raising concerns about financial stability.

The company’s return on equity (ROE) averages a modest 1.90%, reflecting limited profitability generated per unit of shareholders’ funds. This figure is indicative of subdued operational efficiency and challenges in delivering value to equity holders.

Recent Financial Results

The latest six-month period ending September 2025 saw a decline in profit after tax (PAT) to Rs.1.28 crore, representing a contraction of 77.78%. Additionally, non-operating income for the quarter accounted for 263.49% of profit before tax (PBT), suggesting that a significant portion of earnings is derived from sources outside core business activities.

Risk Profile and Historical Valuation

The stock’s risk profile is elevated, trading at valuations that are considered risky relative to its historical averages. Over the past year, profits have fallen by 113%, compounding the negative return of -44.70% generated by the stock. This combination of declining profitability and share price depreciation underscores the challenges faced by the company in reversing its fortunes.

Furthermore, National Peroxide Ltd has underperformed the BSE500 index over multiple time horizons, including the last three years, one year, and three months, highlighting persistent underperformance relative to a broad market benchmark.

Shareholding and Sectoral Positioning

The company operates within the commodity chemicals industry and sector, with promoters holding the majority shareholding stake. This concentrated ownership structure may influence strategic decisions and capital allocation priorities.

Summary of Key Metrics

To summarise, National Peroxide Ltd’s stock is currently trading at Rs.395, its lowest level in 52 weeks and all time. The stock’s Mojo Score stands at 12.0, with a Strong Sell grade reflecting deteriorated fundamentals. Market capitalisation grading is at 4, indicating a relatively modest market cap within its sector. The stock’s recent performance has been marked by a steady decline, with a 44.70% loss over the past year and a significant drop in operating profits.

These factors collectively illustrate the challenges faced by National Peroxide Ltd in maintaining financial health and market confidence amid a difficult operating environment.

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