Key Events This Week
5 Jan: Downgrade to Strong Sell rating announced
6 Jan: Stock declines 1.26% amid bearish technical signals
7 Jan: Modest recovery with 0.93% gain, technical momentum shifts mildly bearish
9 Jan: Week closes at Rs.861.00, down 1.03% for the week
5 January 2026: Downgrade to Strong Sell Amid Weak Financials
Permanent Magnets Ltd began the week trading at Rs.871.00, a slight increase of 0.11% from the previous close, despite the broader Sensex declining 0.18%. However, the key development on this day was the announcement of a downgrade by MarketsMOJO from a Sell to a Strong Sell rating. This downgrade was driven by deteriorating financial performance, including a sharp 69.63% fall in profit before tax (excluding other income) to Rs.2.32 crores in Q2 FY25-26, and a 66.6% drop in profit after tax to Rs.2.37 crores.
The company’s Mojo Score plummeted to 27.0, signalling heightened caution. Operating profit growth remains modest at a 3.09% CAGR over five years, while return on capital employed (ROCE) declined to 10.92% for the half-year and 9.3% in the latest quarter, reflecting inefficient capital utilisation. Despite these weak fundamentals, the stock trades at an enterprise value to capital employed (EV/CE) ratio of 4.6, considered expensive relative to its earnings trajectory.
Technical indicators also turned bearish, with the weekly MACD and Bollinger Bands signalling downward pressure, daily moving averages showing resistance, and the Know Sure Thing (KST) indicator bearish on the weekly chart. The stock’s price action remained subdued near Rs.871.00, close to recent lows and well below its 52-week high of Rs.1,229.90.
6 January 2026: Price Declines 1.26% Amid Bearish Technical Momentum
On 6 January, Permanent Magnets Ltd’s share price fell sharply by 1.26% to Rs.860.00, underperforming the Sensex which declined 0.19%. This drop reflected the market’s reaction to the downgrade and the continuation of bearish technical momentum. The stock’s intraday range was narrow, indicating subdued trading interest amid negative sentiment.
Technical analysis confirmed a shift from mildly bearish to outright bearish momentum. The weekly MACD remained bearish, while the monthly MACD was mildly bullish but overshadowed by short-term weakness. The Relative Strength Index (RSI) showed no clear directional signal, suggesting indecision, while Bollinger Bands indicated increased volatility and downward pressure. Daily moving averages and the KST oscillator reinforced the bearish outlook.
Comparatively, the stock’s one-week return was negative 1.49%, contrasting with a 0.46% gain in the Sensex, highlighting relative underperformance. Year-to-date, the stock declined 0.92%, while the Sensex dipped only 0.18%, further emphasising the stock’s laggard status amid sector and company-specific challenges.
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7 January 2026: Mild Recovery and Mixed Technical Signals
The stock rebounded modestly on 7 January, gaining 0.93% to close at Rs.868.00, while the Sensex edged up 0.03%. This intraday recovery suggested some buying interest, but technical indicators painted a complex picture. The overall trend shifted from bearish to mildly bearish, reflecting tentative improvement in momentum but persistent downward pressure.
The weekly MACD remained bearish, while the monthly MACD turned mildly bullish, indicating potential longer-term strength. The RSI remained neutral, signalling neither overbought nor oversold conditions. Bollinger Bands continued to show bearish signals on the weekly chart but were only mildly bearish monthly, suggesting easing volatility. The KST indicator was bearish weekly but mildly bullish monthly, reinforcing the mixed outlook.
Dow Theory analysis showed no clear trend, highlighting uncertainty in directional conviction. The stock’s 52-week range from Rs.600.00 to Rs.1,229.90 underscores significant volatility, with current prices near the lower end. Volume remained moderate, limiting confirmation of momentum shifts.
8-9 January 2026: Continued Pressure and Week Close
On 8 January, the stock slipped 0.46% to Rs.864.00 amid a sharp 1.41% drop in the Sensex, reflecting broader market weakness. Technical momentum remained mildly bearish, with daily moving averages signalling resistance and Bollinger Bands indicating sustained volatility. On 9 January, the stock declined a further 0.35% to Rs.861.00, closing the week down 1.03% overall.
Despite the modest weekly decline, Permanent Magnets Ltd outperformed the Sensex’s 2.62% fall, reflecting relative resilience amid sector headwinds. However, the downgrade to Strong Sell and mixed technical signals suggest caution remains warranted.
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Daily Price Comparison: Permanent Magnets Ltd vs Sensex
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-01-05 | Rs.871.00 | +0.11% | 37,730.95 | -0.18% |
| 2026-01-06 | Rs.860.00 | -1.26% | 37,657.70 | -0.19% |
| 2026-01-07 | Rs.868.00 | +0.93% | 37,669.63 | +0.03% |
| 2026-01-08 | Rs.864.00 | -0.46% | 37,137.33 | -1.41% |
| 2026-01-09 | Rs.861.00 | -0.35% | 36,807.62 | -0.89% |
Key Takeaways
Negative Financials and Downgrade: The downgrade to Strong Sell was driven by a sharp decline in profitability, weak earnings momentum, and inefficient capital utilisation. The company’s financials remain under pressure with significant drops in PBT and PAT.
Bearish Technical Momentum: Technical indicators predominantly signalled bearish momentum early in the week, with the weekly MACD, Bollinger Bands, and daily moving averages pointing to downward pressure. The stock’s price hovered near recent lows, reflecting subdued investor interest.
Mixed Signals Midweek: A modest recovery on 7 January brought mixed technical signals, with monthly indicators showing mild bullishness contrasting with bearish weekly and daily trends. This divergence suggests potential for longer-term support but short-term caution.
Relative Performance: Despite a 1.03% weekly decline, Permanent Magnets Ltd outperformed the Sensex’s 2.62% fall, indicating some resilience amid broader market weakness. However, the stock continues to lag behind its historical long-term returns and sector benchmarks.
Volume and Market Cap Considerations: Trading volumes remained moderate, and the company’s modest market capitalisation grade of 4 may contribute to volatility and sensitivity to technical shifts.
Conclusion
Permanent Magnets Ltd’s week was characterised by a significant downgrade to Strong Sell amid deteriorating financials and bearish technical momentum. While the stock showed some signs of stabilisation midweek with mixed technical signals, the overall trend remains cautious. The company’s weak profitability, expensive valuation relative to fundamentals, and subdued price action suggest that investors should maintain a prudent stance. The stock’s relative outperformance versus the Sensex’s sharper decline offers some consolation, but the prevailing uncertainties and technical challenges underscore the need for careful monitoring of key support levels and momentum indicators in the coming weeks.
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