Quarterly Financial Performance: A Mixed Bag
The latest quarter ending December 2025 has been challenging for Sanghvi Movers. While the company recorded net sales of ₹445.68 crores, reflecting a healthy 22.41% increase compared to previous periods, other critical financial indicators have deteriorated. The financial trend score has dropped sharply to -7 from a neutral 0 over the past three months, signalling emerging concerns among investors and analysts alike.
One of the most significant areas of concern is the company’s return on capital employed (ROCE), which has fallen to a six-month low of 12.25%. This contraction in capital efficiency suggests that the company is generating lower returns on its investments, which could impact long-term shareholder value. Additionally, the operating profit to interest coverage ratio has declined to 9.21 times, the lowest in recent quarters, indicating increased pressure on the company’s ability to service its debt comfortably.
Rising Debt and Interest Costs
Sanghvi Movers’ debt-equity ratio has climbed to 0.41 times, marking the highest level in the half-year period. This uptick in leverage is accompanied by a rise in interest expenses, which reached ₹9.27 crores in the latest quarter, the highest recorded in recent times. The combination of higher debt and interest costs could constrain the company’s financial flexibility and increase vulnerability to interest rate fluctuations.
Moreover, earnings per share (EPS) have declined to ₹3.35, the lowest quarterly figure in the recent past. This drop in profitability per share is a red flag for investors, especially when juxtaposed against the company’s strong sales growth, highlighting margin pressures and rising costs.
Stock Price and Market Performance
On the stock market front, Sanghvi Movers closed at ₹320.10 on 9 February 2026, down 2.30% from the previous close of ₹327.65. The stock has traded within a 52-week range of ₹205.00 to ₹412.90, indicating significant volatility over the past year. Intraday trading on the day saw prices fluctuate between ₹316.25 and ₹325.15, reflecting cautious investor sentiment amid the company’s mixed financial signals.
When compared to the broader market, Sanghvi Movers’ returns have been a tale of contrasts. Over the past week, the stock outperformed the Sensex with a 5.99% gain versus the benchmark’s 1.59%. However, over longer periods, the stock has underperformed recently, with a 1-month and year-to-date return of -7.20% and -7.49% respectively, compared to the Sensex’s -1.74% and -1.92%. Despite this short-term weakness, the company has delivered impressive long-term returns, with a 5-year gain of 483.86% far outpacing the Sensex’s 64.75% and a 3-year return of 87.58% versus 38.13% for the benchmark.
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Industry Context and Sectoral Comparison
Operating within the automobile sector, Sanghvi Movers faces stiff competition and cyclical demand patterns. The sector has been grappling with supply chain disruptions and fluctuating raw material costs, which have impacted margins across the board. Sanghvi’s margin contraction and rising interest burden are reflective of these broader industry challenges.
Despite these headwinds, the company’s ability to grow net sales by over 22% in the last six months is commendable and suggests sustained demand for its services. However, the deteriorating profitability metrics and increased leverage raise questions about the sustainability of this growth without further margin recovery or cost control measures.
Outlook and Analyst Ratings
Reflecting the recent financial developments, the company’s Mojo Grade was downgraded from Hold to Sell on 12 January 2026, with a current Mojo Score of 31.0. The market cap grade remains low at 3, indicating limited upside potential relative to peers. Analysts caution that while Sanghvi Movers has demonstrated strong top-line growth, the negative shift in financial trends and weakening operational efficiency warrant a cautious stance.
Investors should closely monitor upcoming quarterly results for signs of margin stabilisation or improvement in capital efficiency. The company’s ability to manage its debt levels and interest costs will be critical in determining its medium-term financial health and stock performance.
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Investor Takeaway
For investors, Sanghvi Movers presents a complex picture. The company’s impressive sales growth and strong long-term returns highlight its market potential and operational scale. However, the recent negative financial trend, marked by declining ROCE, rising debt, and shrinking margins, signals caution. The downgrade to a Sell rating underscores the need for prudent portfolio management and consideration of alternative investment opportunities within the automobile sector or beyond.
Given the current financial landscape, investors should weigh the risks of margin pressure and leverage against the company’s growth prospects. Monitoring quarterly updates and sectoral developments will be essential to reassess Sanghvi Movers’ investment appeal in the coming months.
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