National Peroxide Ltd Hits All-Time Low Amid Prolonged Downtrend

Recent Price Movements and Market Context

On the day of the new low, National Peroxide Ltd’s shares touched an intraday low of Rs.420, representing a 2.26% drop from the previous close. Despite a modest recovery to close with a 0.98% gain, the stock underperformed its sector by 1.76%. This marks the third consecutive day of losses, with the stock declining by 10.06% over this short span. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.

Comparatively, the broader Sensex index showed a slight negative return of 0.23% on the same day, underscoring the stock’s relative weakness. Over longer periods, National Peroxide Ltd’s performance has been notably poor. The stock has declined by 7.29% year-to-date versus a 0.42% fall in the Sensex. Over one month, the stock fell 13.25%, while the Sensex dipped just 0.99%. The three-month performance is particularly stark, with a 28.00% loss against a 3.59% gain in the Sensex.

Long-Term Performance and Valuation Trends

National Peroxide Ltd’s struggles extend well beyond recent months. The stock has delivered a negative return of 47.65% over the past year, in contrast to the Sensex’s 8.53% gain. Over three and five years, the stock has effectively stagnated with zero returns, while the Sensex surged by 41.68% and 76.46% respectively. The ten-year performance is similarly flat for the stock, compared to a robust 241.49% increase in the Sensex.

This underperformance is mirrored in the company’s valuation metrics. The stock is currently rated a “Strong Sell” with a Mojo Score of 12.0, downgraded from a “Sell” rating on 7 May 2025. The Market Cap Grade stands at 4, indicating a relatively small market capitalisation within its sector. The downgrade reflects concerns over the company’s deteriorating fundamentals and weak financial health.

Financial Health and Profitability Metrics

The company’s financial indicators reveal significant challenges. Operating profits have declined at a compound annual growth rate (CAGR) of -135.58% over the past five years, signalling a sustained erosion of core earnings capacity. The average EBIT to interest coverage ratio stands at a low 0.14, indicating limited ability to comfortably service debt obligations. This weak coverage ratio suggests heightened financial risk.

Return on Equity (ROE) has averaged a modest 1.90%, reflecting limited profitability generated from shareholders’ funds. The latest six-month period ending September 2025 saw a further contraction in profit after tax (PAT), which stood at Rs.1.28 crore, representing a decline of 77.78% compared to the prior period. Notably, non-operating income accounted for 263.49% of profit before tax (PBT), highlighting reliance on income sources outside core operations.

Risk Profile and Valuation Concerns

National Peroxide Ltd’s stock is considered risky relative to its historical valuation averages. The sharp decline in profits by 113% over the past year, coupled with a 47.65% negative return, underscores the company’s deteriorating earnings quality and market sentiment. The stock’s underperformance extends across multiple time frames, including the last three months, one year, and three years, where it has lagged the BSE500 index.

Majority ownership remains with promoters, which may influence strategic decisions and capital allocation. However, the current financial and market data reflect a company facing significant headwinds within the commodity chemicals sector.

Summary of Performance and Market Standing

National Peroxide Ltd’s stock has reached an unprecedented low of Rs.420, reflecting a prolonged period of decline and underperformance relative to broader market indices and sector peers. The company’s financial metrics reveal a pattern of shrinking operating profits, weak debt servicing capacity, and limited returns on equity. These factors have contributed to a downgrade in its Mojo Grade to Strong Sell, signalling caution within the investment community.

Despite a slight positive movement on the day of the new low, the stock remains below all key moving averages and continues to lag the Sensex and BSE500 indices across multiple time horizons. The company’s reliance on non-operating income to bolster profitability further highlights the challenges faced in its core business operations.

Overall, the data portrays a company grappling with significant financial and market pressures, as reflected in its all-time low share price and subdued performance metrics.

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