Stock Performance and Market Context
On the day the new low was recorded, National Peroxide Ltd underperformed its sector by 0.43%, with the stock falling 0.53%. This decline contrasts with the broader market trend, where the Sensex opened flat and traded marginally lower by 0.19%, standing at 84,879.01 points. Notably, the Sensex remains close to its 52-week high of 86,159.02, trading above its 50-day and 200-day moving averages, signalling a generally bullish market environment. In stark contrast, National Peroxide Ltd is trading below all key moving averages – 5-day, 20-day, 50-day, 100-day, and 200-day – underscoring the stock’s weak momentum.
Over the past year, National Peroxide Ltd’s stock has delivered a negative return of 41.84%, significantly underperforming the Sensex’s positive 7.86% gain. The stock’s 52-week high was Rs.850, highlighting the extent of the decline to the current low.
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Financial Performance and Profitability Concerns
National Peroxide Ltd’s financial metrics reveal ongoing challenges. The company’s long-term fundamental strength is weak, with a compounded annual growth rate (CAGR) of operating profits declining by 135.58% over the last five years. This steep negative growth rate reflects deteriorating earnings capacity.
The company’s ability to service its debt is also under pressure, with an average EBIT to interest ratio of just 0.14, indicating that earnings before interest and tax are insufficient to comfortably cover interest expenses. This ratio is a critical indicator of financial health, and such a low figure suggests elevated risk in meeting debt obligations.
Profitability metrics further highlight subdued returns. The average return on equity (ROE) stands at 1.90%, signalling limited profitability generated per unit of shareholders’ funds. This low ROE contrasts with typical industry benchmarks and points to inefficiencies in capital utilisation.
Recent results for the six months ended September 2025 show a decline in profit after tax (PAT) to Rs.1.28 crore, representing a contraction of 77.78% compared to the prior period. Additionally, non-operating income accounted for 263.49% of profit before tax (PBT), indicating that core business earnings are insufficient and the company is relying heavily on non-operating sources to sustain profitability.
Valuation and Risk Profile
The stock’s valuation appears stretched relative to its historical averages. Over the past year, while the stock price has fallen by 42.15%, profits have declined by 113%, reflecting a disconnect between price movement and earnings deterioration. This disparity suggests heightened risk and volatility for investors.
In terms of relative performance, National Peroxide Ltd has underperformed the BSE500 index over multiple time frames, including the last three years, one year, and three months. This consistent underperformance underscores the stock’s challenges in delivering returns comparable to broader market indices.
Shareholding and Sectoral Position
The company remains majority-owned by promoters, which can influence strategic decisions and capital allocation. Operating within the commodity chemicals sector, National Peroxide Ltd faces sector-specific pressures, including raw material price volatility and competitive dynamics, which may contribute to its current valuation and performance.
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Summary of Key Metrics
To summarise, National Peroxide Ltd’s stock has reached a new 52-week low of Rs.462.6, reflecting a year-long decline of 41.84%. The company’s financial indicators reveal a contraction in operating profits, weak debt servicing capacity, and low returns on equity. The stock trades below all major moving averages, signalling weak technical momentum. Despite a broadly positive market environment, with the Sensex near its 52-week high, National Peroxide Ltd continues to face valuation and profitability challenges within the commodity chemicals sector.
Market Sentiment and Outlook
While the broader market indices maintain a bullish stance, National Peroxide Ltd’s performance remains subdued. The company’s Moody’s Mojo Score stands at 12.0 with a Strong Sell grade, recently downgraded from Sell on 7 May 2025. The market capitalisation grade is rated 4, indicating a smaller market cap relative to peers. These ratings reflect the current assessment of the company’s financial health and market position.
Given the stock’s recent price action and financial profile, it remains a subject of close observation within the commodity chemicals sector, where investors continue to monitor earnings trends and valuation metrics.
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