Market Context and Stock Performance
While the broader market showed strength, with the Sensex climbing 427.51 points to close at 85,573.41, just 0.68% shy of its 52-week peak of 86,159.02, Rossell India’s stock moved in the opposite direction. The company’s shares underperformed its sector by 0.92% on the day, reflecting a divergence from the overall FMCG sector and market momentum.
Rossell India is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This persistent downward trend in technical indicators highlights the stock’s ongoing weakness relative to its historical price levels and market benchmarks.
Long-Term Price Movement
Over the past year, Rossell India’s stock price has declined by 34.93%, contrasting sharply with the Sensex’s 9.61% gain during the same period. The stock’s 52-week high was Rs.86.65, indicating a substantial erosion in value over the last twelve months. This performance also trails the BSE500 index across multiple time frames, including the last three years, one year, and three months, underscoring a sustained period of underperformance.
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Financial Metrics and Profitability
Rossell India’s financial indicators reveal challenges in sustaining profitability and growth. The company’s operating profits have shown a compound annual growth rate (CAGR) of -18.57% over the last five years, indicating a contraction in core earnings capacity. This trend is reflected in the company’s return on equity (ROE), which averages 7.59%, suggesting limited profitability generated per unit of shareholders’ funds.
Additionally, the company’s ability to service its debt is constrained, with a Debt to EBITDA ratio of 3.54 times. This level points to a relatively high leverage position, which may affect financial flexibility and risk profile.
Valuation and Enterprise Metrics
Despite the subdued price performance, Rossell India’s valuation metrics present some contrasting signals. The company’s return on capital employed (ROCE) stands at 5.4%, and it has an enterprise value to capital employed ratio of 0.8, which is considered very attractive. This suggests that the stock is trading at a discount relative to the capital invested in the business.
Over the past year, while the stock price declined by nearly 35%, the company’s profits have risen by 11.8%. The price-to-earnings-to-growth (PEG) ratio is 1.1, indicating a valuation that is not excessively stretched relative to earnings growth.
Shareholding and Sector Position
Rossell India operates within the FMCG sector, a segment that has generally shown resilience and growth in the Indian market. The company’s majority shareholders are promoters, maintaining significant control over strategic decisions and corporate governance.
However, the stock’s recent performance and valuation metrics suggest a divergence from sector trends, as the broader FMCG sector has not mirrored the same level of price weakness.
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Recent Trading and Market Dynamics
On the day Rossell India hit its 52-week low, the broader market environment was characterised by strength in small-cap stocks, with the BSE Small Cap index gaining 1.17%. The Sensex’s bullish momentum was supported by its position above the 50-day moving average, which itself is above the 200-day moving average, signalling a positive technical backdrop for the market overall.
In contrast, Rossell India’s share price movement reflects a continuation of its subdued trend, trading below all major moving averages and underperforming its sector peers. The stock’s day change was recorded at -1.55%, further emphasising the downward pressure on its price.
Summary of Key Price and Performance Data
To summarise, Rossell India’s stock has reached Rs.50, its lowest level in the past 52 weeks, while the Sensex and FMCG sector have shown relative strength. The stock’s year-on-year return stands at -34.93%, with a 52-week high of Rs.86.65. Its financial metrics reveal a contraction in operating profits over five years, moderate return on equity, and a high debt servicing ratio. Valuation ratios indicate the stock is trading at a discount compared to capital employed and peers’ historical averages.
These factors collectively illustrate the current state of Rossell India’s stock within the context of a rising market and sector environment, highlighting the divergence in performance and valuation.
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