Stock Performance and Market Context
On the latest trading day, Revathi Equipment India’s stock closed near its 52-week low, just 0.81% above the lowest price recorded in the past year at Rs 764.25. Despite opening with an intraday gain of 2.61%, the stock ultimately declined by 2.16%, underperforming the broader Sensex index, which recorded a marginal fall of 0.15%. The stock also lagged behind its sector peers, with a relative underperformance of 0.58% compared to the industrial manufacturing sector.
Technical indicators reveal that the stock is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, signalling a persistent bearish trend. This technical positioning highlights the stock’s difficulty in regaining upward momentum amid prevailing market conditions.
Long-Term and Short-Term Returns
Examining the stock’s returns over various time horizons paints a challenging picture. Over the past year, Revathi Equipment India has recorded a negative return of 59.21%, a stark contrast to the Sensex’s positive 7.24% return during the same period. Year-to-date figures show a decline of 61.75%, while the Sensex has advanced by 9.52%. The stock’s performance over the last three months and one month also reflects negative returns of 10.06% and 16.36% respectively, whereas the Sensex posted gains of 6.49% and 1.95% in these intervals.
Longer-term data indicates that the stock has not generated returns over the past three, five, and ten years, standing at 0.00% for each period. This contrasts sharply with the Sensex, which has delivered returns of 35.23%, 91.64%, and 227.01% respectively over the same durations.
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Financial Results and Profitability Metrics
Recent quarterly results have shown a contraction in net sales, with the latest quarter reporting net sales of Rs 22.83 crore, representing a decline of 38.6% compared to the average of the previous four quarters. This downturn in sales has coincided with operating losses, as indicated by an operating profit to interest ratio of -0.42 times, the lowest recorded in recent periods.
Profit after tax (PAT) for the latest six months stands at Rs 0.99 crore, reflecting a reduction of 37.15%. The company has reported negative results for four consecutive quarters, underscoring the ongoing financial pressures.
Return on equity (ROE), averaged at 8.19%, suggests limited profitability relative to shareholders’ funds. This figure, combined with the operating losses, points to subdued earnings generation capacity within the company’s current operational framework.
Valuation and Shareholding Structure
Despite the challenging financial performance, the stock’s valuation metrics indicate a price-to-book value of approximately 1.9, which may be considered attractive relative to its sector peers. The majority shareholding remains with the promoters, maintaining a concentrated ownership structure.
Over the past year, the stock’s profits have declined by 35%, aligning with the broader trend of reduced sales and earnings. This contraction in profitability has been reflected in the stock’s market capitalisation, which is graded at a lower level within its peer group.
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Sector and Industry Positioning
Operating within the industrial manufacturing sector, Revathi Equipment India’s recent performance contrasts with broader sector trends, where many peers have maintained or improved their market positions. The stock’s underperformance relative to the BSE500 index over the last three years, one year, and three months further highlights the divergence from general market movements.
The company’s market capitalisation grade of 4 indicates a relatively modest size within its industry, which may influence liquidity and investor attention.
Summary of Current Situation
Revathi Equipment India’s stock has reached an unprecedented low, reflecting a combination of declining sales, reduced profitability, and sustained negative returns over multiple time frames. The stock’s technical indicators and valuation metrics provide a comprehensive view of its current standing within the industrial manufacturing sector.
While the company maintains promoter majority ownership, the financial data points to a period of contraction and subdued market performance. The stock’s position below all major moving averages and its relative underperformance against benchmark indices underscore the challenges faced in regaining investor confidence and market momentum.
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