Stock Price Movement and Market Context
On 7 January 2026, Nikhil Adhesives Ltd’s share price fell sharply, hitting an intraday low of Rs.70, representing a 10.1% drop within the trading session. The stock closed with a day change of -2.40%, underperforming its sector by approximately 5%. This decline extends a two-day losing streak, during which the stock has lost 5.68% cumulatively. The share price is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
The broader market context shows a mixed picture. The Sensex opened lower at 84,620.40, down 442.94 points (-0.52%), and was trading at 84,809.52 (-0.3%) during the day. Despite this, the Sensex remains close to its 52-week high of 86,159.02, just 1.59% away. Mid-cap stocks led the market with the BSE Mid Cap index gaining 0.21%, contrasting with Nikhil Adhesives’ underperformance.
Long-Term Performance and Financial Metrics
Over the past year, Nikhil Adhesives Ltd has delivered a negative return of -35.11%, significantly lagging behind the Sensex’s positive 8.46% return. The stock’s 52-week high was Rs.129, underscoring the extent of the recent decline. The company’s long-term growth has been modest, with net sales increasing at an annual rate of 8.55% and operating profit growing at 17.96% over the last five years. However, these growth rates have not translated into positive stock performance.
Recent financial results have added to concerns. The company reported its lowest operating cash flow in the latest fiscal year at Rs.6.90 crores. Profit after tax (PAT) for the latest six months stood at Rs.6.74 crores, reflecting a decline of 30.01%. Additionally, cash and cash equivalents were reported at a low Rs.2.13 crores for the half-year period. These figures indicate tightening liquidity and reduced profitability.
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Valuation and Efficiency Indicators
Despite the recent price decline, Nikhil Adhesives Ltd exhibits some positive financial attributes. The company maintains a high return on capital employed (ROCE) of 26.93%, indicating efficient use of capital in generating profits. Its debt servicing capability is strong, with a low Debt to EBITDA ratio of 1.17 times, suggesting manageable leverage levels.
Valuation metrics also present an interesting picture. The stock’s ROCE of 15.1 and an enterprise value to capital employed ratio of 2.2 reflect a very attractive valuation relative to its peers. The stock is trading at a discount compared to the average historical valuations of comparable companies in the Specialty Chemicals sector. However, this valuation discount has coincided with a profit decline of 11.9% over the past year, which may temper investor enthusiasm.
Consistent Underperformance Against Benchmarks
Nikhil Adhesives Ltd has consistently underperformed the broader market and its sector peers over recent years. The stock has generated negative returns in each of the last three annual periods relative to the BSE500 index. This trend highlights ongoing challenges in delivering shareholder value despite the company’s operational strengths.
The company’s Mojo Score currently stands at 38.0, with a Mojo Grade of Sell, downgraded from Hold on 24 November 2025. The Market Cap Grade is rated at 4, reflecting a relatively modest market capitalisation within its sector. These ratings underscore the cautious stance reflected in the stock’s recent price action.
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Shareholding and Sector Position
The majority shareholding in Nikhil Adhesives Ltd is held by promoters, indicating concentrated ownership. The company operates within the Specialty Chemicals industry, a sector known for its cyclical nature and sensitivity to raw material costs and regulatory changes. The stock’s recent volatility, with an intraday price fluctuation of 6.04%, reflects heightened uncertainty among market participants.
Summary of Key Price and Performance Metrics
To summarise, the stock’s 52-week low of Rs.70 contrasts sharply with its 52-week high of Rs.129, illustrating a significant depreciation in value. The two-day consecutive decline of 5.68% and underperformance relative to the sector by 5% today highlight ongoing downward pressure. The stock’s position below all major moving averages further emphasises the current bearish trend.
While the broader market indices remain relatively stable and even positive in mid-cap segments, Nikhil Adhesives Ltd’s performance remains subdued. The company’s financial indicators reveal a mixed picture, with strong capital efficiency and manageable debt but declining profitability and cash reserves.
These factors collectively contribute to the stock’s current valuation and market sentiment, as reflected in its recent price movements and rating adjustments.
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