Key Events This Week
16 Feb: Quarterly results reveal stabilised margins despite sharp sales drop
17 Feb: Stock rallies 2.73% on improved volume and optimism
18 Feb: Profit-taking leads to 1.40% decline amid broader market gains
19 Feb: Sharp 6.95% drop as Sensex falls 1.45%
20 Feb: Recovery rally of 3.38% closes the week
16 February: Quarterly Results Highlight Margin Expansion Amid Revenue Decline
Shah Alloys Ltd reported its December 2025 quarter results on 16 February, revealing a stabilised financial performance despite a severe 79.65% contraction in net sales to ₹10.58 crores year-on-year. The company achieved an unprecedented operating profit to net sales ratio of 71.55%, driven by stringent cost controls and operational efficiencies. This translated into a record PBDIT of ₹7.57 crores and a net profit after tax of ₹5.31 crores, with earnings per share rising to ₹19.42.
Financial trend scores improved from -11 to a neutral 3, signalling a halt to previous declines. However, the nine-month PAT remained negative at ₹-2.47 crores, underscoring ongoing challenges in sustaining profitability. The stock closed the day at Rs.66.19, up a marginal 0.14%, reflecting cautious investor optimism amid mixed fundamentals.
17 February: Strong Volume Boosts 2.73% Price Gain
On 17 February, Shah Alloys’ stock surged 2.73% to Rs.68.00, supported by a significant increase in traded volume to 75,001 shares. This rally outpaced the Sensex’s 0.32% gain, suggesting renewed investor interest following the quarterly results. The price movement indicated a positive market reaction to the company’s margin expansion and improved debt servicing capacity, despite the revenue concerns.
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18 February: Profit-Taking Triggers 1.40% Decline Despite Sensex Gains
The stock retreated 1.40% to Rs.67.05 on 18 February, even as the Sensex advanced 0.43%. Lower volume of 1,069 shares accompanied this decline, indicating selective profit-taking after the previous day’s strong rally. This price action reflected investor caution amid the company’s ongoing revenue challenges, despite the positive margin narrative.
19 February: Sharp 6.95% Drop Mirrors Broader Market Weakness
Shah Alloys suffered a steep 6.95% fall to Rs.62.39 on 19 February, coinciding with a significant 1.45% drop in the Sensex. The stock’s decline was sharper than the market, signalling heightened risk aversion. Trading volume was subdued at 814 shares, suggesting limited buying interest amid negative sentiment. This day’s movement underscored the vulnerability of the stock to broader market pressures and lingering concerns over the company’s revenue trajectory.
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20 February: Recovery Rally Closes Week on Positive Note
The stock rebounded 3.38% to Rs.64.50 on the final trading day, supported by a modest volume of 56 shares. The Sensex also gained 0.41%, reflecting a broadly positive market environment. This recovery helped limit the weekly loss to 2.42%, though the stock still underperformed the Sensex’s 0.39% gain. The bounce back suggests some investor confidence returning after the prior day’s sharp sell-off.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | Rs.66.19 | +0.14% | 36,787.89 | +0.70% |
| 2026-02-17 | Rs.68.00 | +2.73% | 36,904.38 | +0.32% |
| 2026-02-18 | Rs.67.05 | -1.40% | 37,062.35 | +0.43% |
| 2026-02-19 | Rs.62.39 | -6.95% | 36,523.88 | -1.45% |
| 2026-02-20 | Rs.64.50 | +3.38% | 36,674.32 | +0.41% |
Key Takeaways
Shah Alloys Ltd’s week was characterised by a complex interplay of operational improvements and market headwinds. The company’s record margin expansion and improved profitability metrics in the December quarter represent a significant positive development, highlighting effective cost management and operational discipline.
However, the steep 79.65% decline in net sales remains a critical concern, limiting the sustainability of profit gains. The negative nine-month PAT further emphasises the ongoing revenue challenges. The stock’s volatile price action, including a sharp 6.95% drop midweek, reflects investor uncertainty about the company’s ability to translate margin gains into consistent top-line growth.
Relative to the Sensex, Shah Alloys underperformed, losing 2.42% against the index’s 0.39% gain. This divergence underscores the stock’s sensitivity to both company-specific news and broader market fluctuations. The improved financial trend score and upgraded Mojo Grade to Sell from Strong Sell indicate cautious optimism but also signal that risks remain elevated.
Investors should monitor upcoming quarterly results and revenue trends closely to assess whether the margin improvements can be sustained alongside a recovery in sales volumes.
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