Sakthi Finance Ltd Falls to 52-Week Low Amidst Continued Downtrend

Stock Price Movement and Market Context

On 25 Feb 2026, Sakthi Finance’s share price slipped to Rs.24.39, the lowest level in the past year. This decline comes after two consecutive days of losses, during which the stock has fallen by 4.16%. The day’s performance saw the stock underperform its NBFC sector peers by 1.25%, continuing a trend of relative weakness. Notably, the stock is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bearish sentiment among market participants.

In contrast, the broader market showed resilience. The Sensex opened higher at 82,530.12, gaining 304.20 points (0.37%) before settling near 82,226.91, just 4.78% shy of its 52-week high of 86,159.02. Despite the Sensex trading below its 50-day moving average, the 50DMA remains above the 200DMA, indicating a generally positive medium-term trend for the benchmark index.

Long-Term Performance and Valuation Metrics

Over the last 12 months, Sakthi Finance has delivered a negative return of 49.58%, a stark contrast to the Sensex’s positive 10.16% gain over the same period. The stock’s 52-week high was Rs.58, underscoring the extent of the recent decline. This underperformance extends beyond the past year, with the stock lagging the BSE500 index across one-year, three-year, and three-month timeframes.

From a valuation standpoint, Sakthi Finance trades at a Price to Book Value ratio of 0.7, which is considered very attractive relative to its peers’ historical averages. This discount reflects market concerns about the company’s financial health and growth prospects, despite the seemingly favourable valuation.

Financial Performance and Credit Metrics

The company’s recent quarterly results highlight ongoing pressures. For the quarter ended December 2025, Sakthi Finance reported its lowest Profit Before Tax excluding other income (PBT LESS OI) at Rs.1.39 crore and a Profit After Tax (PAT) of Rs.3.75 crore, both reflecting subdued profitability. These figures contribute to the company’s weak long-term fundamental strength, with an average Return on Equity (ROE) of just 6.25%.

Debt levels remain elevated, with the half-yearly Debt-Equity ratio reaching a high of 5.45 times. This leverage ratio is a key concern, indicating significant reliance on borrowed funds, which may constrain financial flexibility and increase risk exposure in a challenging credit environment.

Growth Trends and Sector Comparison

Net sales and operating profit growth have been modest, with annual rates of 4.61% and 4.66% respectively. These figures suggest limited expansion in core business operations over the longer term. Profitability has also seen a slight decline, with profits falling by 0.2% over the past year. Such trends contrast with more robust growth seen in other NBFCs, contributing to the stock’s relative underperformance.

Despite these challenges, the company’s valuation remains discounted compared to peers, which may reflect market caution given the combination of weak growth, profitability, and high leverage.

Shareholding and Market Sentiment

The majority shareholding in Sakthi Finance is held by promoters, indicating concentrated ownership. The company’s Mojo Score stands at 17.0, with a Mojo Grade of Strong Sell as of 8 Jan 2026, an upgrade from the previous Sell rating. This grading reflects the assessment of the company’s financial health, growth prospects, and market performance, signalling caution in the current environment.

Market capitalisation is graded at 4, underscoring the company’s relatively modest size within the NBFC sector. The stock’s day change of -2.10% on the latest trading session further emphasises the ongoing downward pressure.

Summary of Key Metrics

To summarise, Sakthi Finance Ltd’s key financial and market indicators as of 25 Feb 2026 are:

• New 52-week low price: Rs.24.39
• One-year stock return: -49.58%
• Sensex one-year return: +10.16%
• Average ROE: 6.25%
• Annual net sales growth: 4.61%
• Annual operating profit growth: 4.66%
• Quarterly PBT LESS OI: Rs.1.39 crore (lowest)
• Quarterly PAT: Rs.3.75 crore (lowest)
• Debt-Equity ratio (half-yearly): 5.45 times (highest)
• Price to Book Value: 0.7
• Mojo Score: 17.0 (Strong Sell)

These figures collectively illustrate the challenges faced by Sakthi Finance Ltd in maintaining growth and profitability, alongside elevated leverage and subdued market performance.

Conclusion

The fall to a 52-week low of Rs.24.39 marks a significant milestone in Sakthi Finance Ltd’s recent share price trajectory. The stock’s performance has been weighed down by modest growth rates, declining profits, and high leverage, despite a valuation discount relative to peers. While the broader market and sector have shown resilience, Sakthi Finance’s financial metrics and market indicators continue to reflect a cautious outlook.

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