National Peroxide Ltd Hits All-Time Low Amid Prolonged Downtrend

Intraday Price Movement and Recent Performance

On the day in question, the stock opened with a positive gap of 2.35%, reaching an intraday high of Rs.418.85. However, it reversed sharply to touch an intraday low of Rs.395, closing near this bottom with a marginal gain of 0.05%. Despite this slight uptick, the stock underperformed the Commodity Chemicals sector by 3.28% and has been on a downward trajectory for two consecutive sessions, losing 3.09% over this period.

National Peroxide Ltd 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.

Comparative Performance Against Benchmarks

The stock’s recent performance contrasts sharply with broader market indices. Over the past day, National Peroxide Ltd recorded a 0.05% gain, while the Sensex declined by 0.45%. However, this short-term resilience is overshadowed by longer-term underperformance. Over one week, the stock fell 1.23% compared to a 0.81% gain in the Sensex. The divergence widens over one month and three months, with the stock declining 12.44% and 31.05% respectively, while the Sensex fell by only 2.93% and 2.62% in the same periods.

Most notably, the stock has delivered a negative return of 43.68% over the last year, in stark contrast to the Sensex’s 7.08% gain. Year-to-date, the stock is down 12.51%, compared to a 3.55% decline in the Sensex. Over three and five years, National Peroxide Ltd has shown no appreciable price appreciation, remaining flat, while the Sensex has surged 38.14% and 77.58% respectively. The ten-year performance gap is even more pronounced, with the Sensex up 230.49% and National Peroxide Ltd unchanged.

Financial Metrics and Profitability Trends

National Peroxide Ltd’s financial indicators reveal considerable strain. The company’s operating profits have contracted at a compound annual growth rate (CAGR) of -135.58% over the past five years, reflecting a sharp deterioration in core earnings capacity. This decline is mirrored in the company’s profitability ratios, with an average Return on Equity (ROE) of just 1.90%, indicating limited profitability generated per unit of shareholders’ funds.

The company’s ability to service its debt is notably weak, with an average EBIT to interest ratio of 0.14, suggesting that earnings before interest and tax are insufficient to comfortably cover interest expenses. This ratio points to heightened financial risk and constrained operational cash flow.

Recent Earnings and Income Composition

In the latest six-month period ending September 2025, the company reported a profit after tax (PAT) of Rs.1.28 crore, representing a decline of 77.78% compared to the prior period. Additionally, non-operating income accounted for 263.49% of profit before tax (PBT), highlighting a reliance on income sources outside the company’s primary business activities to bolster profitability.

Valuation and Risk Assessment

The stock is currently trading at valuations that are considered risky relative to its historical averages. Over the past year, the stock’s price has fallen by 43.68%, while profits have declined by 113%, underscoring a disconnect between earnings deterioration and market pricing. This combination reflects heightened uncertainty around the company’s financial health and growth prospects.

National Peroxide Ltd’s performance has been below par both in the near term and over longer horizons. It has underperformed the BSE500 index over the last three months, one year, and three years, signalling persistent challenges in generating shareholder value relative to the broader market.

Shareholding and Market Capitalisation

The company’s majority shareholding rests with promoters, maintaining a concentrated ownership structure. The market capitalisation grade assigned to National Peroxide Ltd is 4, indicating a relatively modest market cap within its sector.

Mojo Score and Rating Update

National Peroxide Ltd’s Mojo Score currently stands at 12.0, reflecting a Strong Sell rating. This represents a downgrade from the previous Sell grade assigned on 7 May 2025. The rating reflects the company’s weak long-term fundamentals, deteriorating profitability, and financial risk profile.

Summary of Key Challenges

The stock’s all-time low price is a culmination of sustained declines in earnings, weak returns on equity, and insufficient earnings to cover interest obligations. The reliance on non-operating income to support profits further emphasises the fragility of the company’s earnings base. The stock’s underperformance relative to sector peers and benchmark indices over multiple time frames highlights the severity of the situation.

Market Context and Sector Comparison

Within the Commodity Chemicals sector, National Peroxide Ltd’s performance has lagged significantly. The sector has generally shown more resilience, but the company’s stock has failed to keep pace, reflecting company-specific factors rather than broader market trends. The stock’s recent underperformance of 3.28% relative to its sector on the day of the all-time low further illustrates this divergence.

Conclusion

National Peroxide Ltd’s fall to an all-time low of Rs.395 marks a significant milestone in a prolonged period of financial and market underperformance. The company’s weak profitability metrics, poor debt servicing capacity, and reliance on non-operating income have contributed to a challenging valuation environment. The stock’s sustained underperformance relative to the Sensex and its sector peers underscores the depth of the difficulties faced by the company.

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