Stock Price Movement and Market Context
On 21 Jan 2026, Primo Chemicals Ltd’s share price reached an intraday low of Rs 20.13, representing a 5.05% drop during the trading session. This decline contributed to a day change of -4.01%, underperforming the commodity chemicals sector by 3.17%. The stock has now recorded losses for three consecutive days, accumulating a negative return of 8.35% over this period.
Primo Chemicals 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. This contrasts with the broader market, where the Sensex opened 385.82 points lower and is trading at 81,605.33, down 0.7%. The Sensex itself has been on a three-week losing streak, shedding 4.85% in that timeframe, and is trading below its 50-day moving average, although the 50DMA remains above the 200DMA.
Long-Term Performance and Relative Returns
Over the past year, Primo Chemicals Ltd has delivered a total return of -42.24%, significantly lagging behind the Sensex’s positive 7.60% return. The stock’s 52-week high was Rs 36.68, highlighting the extent of the decline from its peak. This underperformance is consistent with the company’s track record over the last three years, during which it has failed to keep pace with the BSE500 index in each annual period.
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Financial Performance and Profitability Trends
Primo Chemicals’ financial metrics over recent quarters have reflected subdued growth and profitability pressures. The company reported flat results in the September 2025 quarter, with Profit Before Tax excluding other income (PBT LESS OI) at a loss of Rs 2.76 crore, representing a steep decline of 894.6% compared to the previous four-quarter average.
Net sales for the quarter stood at Rs 134.74 crore, down 6.4% relative to the prior four-quarter average, indicating a contraction in revenue generation. Additionally, the inventory turnover ratio for the half-year period was recorded at 14.53 times, the lowest level observed, suggesting slower inventory movement.
Over the last five years, the company’s net sales have declined at an annualised rate of 4.62%, while operating profit has contracted by 49.93%, underscoring challenges in sustaining growth and margin expansion.
Valuation and Efficiency Metrics
Despite the stock’s recent price weakness, Primo Chemicals exhibits certain positive attributes in terms of management efficiency and valuation. The company maintains a high Return on Capital Employed (ROCE) of 16.01%, reflecting effective utilisation of capital resources. Its average debt-to-equity ratio remains low at 0.34 times, indicating a conservative capital structure.
Valuation metrics also suggest the stock is trading at a discount relative to its peers. With a ROCE of 4.8 and an enterprise value to capital employed ratio of 1.2, the company’s valuation appears attractive on a relative basis. Over the past year, while the stock price declined by 42.24%, reported profits increased by 257.6%, resulting in a low PEG ratio of 0.2, which may indicate undervaluation when considering earnings growth.
Shareholding Pattern and Market Grade
The majority of Primo Chemicals’ shares are held by non-institutional investors. The company’s Mojo Score currently stands at 45.0, with a Mojo Grade of Sell, reflecting a downgrade from a previous Hold rating on 7 Jan 2026. The market capitalisation grade is rated at 4, consistent with its micro-cap status within the commodity chemicals sector.
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Sector and Benchmark Comparison
Within the commodity chemicals sector, Primo Chemicals’ performance has been notably weaker than its peers and the broader market indices. The stock’s consistent underperformance against the BSE500 index over the last three years highlights the challenges faced in maintaining competitive positioning. The sector itself has experienced volatility, but Primo Chemicals’ returns have lagged significantly, reflecting both market and company-specific factors.
The Sensex’s recent three-week decline of 4.85% and its position below the 50-day moving average provide a challenging backdrop for stocks like Primo Chemicals, which are already under pressure from fundamental headwinds.
Summary of Key Metrics
To summarise, Primo Chemicals Ltd’s stock has reached a 52-week low of Rs 20.13, reflecting a sustained period of price weakness. The company’s financial results show declining sales and profitability, with net sales falling 6.4% in the latest quarter and operating profit down nearly 50% over five years. Despite these trends, the firm maintains strong management efficiency with a ROCE of 16.01% and a conservative debt profile. Valuation metrics indicate the stock trades at a discount relative to peers, with a PEG ratio of 0.2 and rising profits over the past year.
Market sentiment remains cautious, as evidenced by the downgrade to a Sell rating and the stock’s underperformance relative to sector and benchmark indices. The broader market environment, including a weakening Sensex, adds to the challenges faced by Primo Chemicals in regaining momentum.
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