Key Events This Week
16 Feb: Q3 FY26 results reveal deepening losses amid margin pressures
17 Feb: Downgrade to Strong Sell by MarketsMOJO due to weak fundamentals and bearish technicals
18 Feb: Upgrade to Sell following technical improvement despite ongoing fundamental weaknesses
20 Feb: Week closes at ₹100.35, down 8.36% for the week versus Sensex gain of 0.39%
16 February: Q3 FY26 Results Highlight Deepening Losses
On 16 February, Sambandam Spinning Mills reported its Q3 FY26 financial results, which revealed a significant deterioration in profitability. The company posted a loss before tax excluding other income (PBT LESS OI) of ₹3.07 crores, down 82.2% compared to the previous four-quarter average. Net profit after tax (PAT) plunged 94.2% to a loss of ₹2.16 crores. These figures underscored persistent margin pressures and operational challenges within the garments and apparels sector.
The market reacted negatively to these results, with the stock closing at ₹100.90, down ₹8.60 or 7.85% from the previous close of ₹109.50. This sharp decline reflected investor concerns about the company’s ability to reverse its earnings slump amid a competitive environment and high leverage.
17 February: Downgrade to Strong Sell Amid Weak Fundamentals and Bearish Technicals
Following the disappointing quarterly results, MarketsMOJO downgraded Sambandam Spinning Mills from a 'Sell' to a 'Strong Sell' rating on 17 February. The downgrade was driven by a comprehensive reassessment of the company’s fundamentals and technical indicators. Key concerns included a negative five-year CAGR of -1.02% in operating profits, low return on equity (4.68%) and capital employed (2.1%), and a high Debt to EBITDA ratio of 11.53 times, signalling elevated financial risk.
Technically, the stock exhibited bearish momentum with daily moving averages turning negative and Bollinger Bands indicating increased volatility. The stock price reflected this sentiment, closing at ₹100.90 on 16 February and failing to recover meaningfully on 17 February.
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18 February: Technical Improvement Spurs Upgrade to Sell
On 18 February, MarketsMOJO revised its rating upward from 'Strong Sell' to 'Sell' following a modest improvement in technical indicators, despite ongoing fundamental weaknesses. The stock price responded positively, surging 6.84% to close at ₹107.80, its weekly high. This rally was supported by mildly bullish weekly MACD and Bollinger Bands, although monthly indicators remained bearish, reflecting mixed momentum.
Fundamentally, the company’s challenges persisted, with flat quarterly performance and high leverage continuing to weigh on investor confidence. The average return on equity and capital employed remained low, and the Debt to EBITDA ratio stayed elevated. Despite these concerns, the technical rebound provided some short-term relief to the stock price.
19-20 February: Price Consolidation Amid Market Volatility
Following the technical-driven upgrade, the stock price retraced some gains, closing at ₹100.50 on 19 February (-1.18%) and ₹100.35 on 20 February (-0.15%). These declines occurred despite the Sensex recovering 0.41% on 20 February, highlighting the stock’s continued vulnerability to fundamental pressures. Trading volumes remained modest, indicating cautious investor participation amid uncertainty.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | ₹100.90 | -7.85% | 36,787.89 | +0.70% |
| 2026-02-17 | ₹107.80 | +6.84% | 36,904.38 | +0.32% |
| 2026-02-18 | ₹101.70 | -5.66% | 37,062.35 | +0.43% |
| 2026-02-19 | ₹100.50 | -1.18% | 36,523.88 | -1.45% |
| 2026-02-20 | ₹100.35 | -0.15% | 36,674.32 | +0.41% |
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Key Takeaways from the Week
Negative Financial Performance: The deepening losses in Q3 FY26, with PBT and PAT plunging over 80% and 90% respectively, highlight ongoing margin pressures and operational inefficiencies that continue to challenge the company’s recovery prospects.
High Leverage and Weak Profitability: Elevated debt levels, with a Debt to EBITDA ratio exceeding 11 times and a debt-equity ratio of 1.46, combined with low returns on equity and capital employed, underscore significant financial risk and limited capital efficiency.
Volatile Price Action Reflecting Mixed Sentiment: The stock’s sharp decline on 16 February following results, subsequent downgrade to Strong Sell, and a technical-driven rebound on 17 February illustrate investor uncertainty. Despite a brief rally, the stock closed the week lower, underperforming the Sensex by a wide margin.
Technical Indicators Show Mixed Signals: While some weekly technical indicators improved, monthly trends remain bearish, suggesting that any short-term recovery may face resistance without fundamental improvements.
Conclusion: Persistent Challenges Amid Technical Fluctuations
Sambandam Spinning Mills Ltd’s share price performance over the week reflects a company grappling with deepening losses, high leverage, and weak profitability, despite some technical improvements that briefly lifted investor sentiment. The 8.36% weekly decline contrasts with the Sensex’s modest gain, underscoring the stock’s relative weakness.
MarketsMOJO’s rating movements from Sell to Strong Sell and back to Sell encapsulate the tension between fundamental deterioration and short-term technical relief. The company’s financial health remains fragile, with significant risks from debt servicing and operational inefficiencies. Until these structural issues are addressed, the stock is likely to remain under pressure despite occasional technical rebounds.
Investors should remain cautious and monitor both fundamental developments and technical signals closely in the coming weeks.
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