Recent Price Movement and Market Context
The stock has recorded a consecutive fall over the last five trading sessions, resulting in a cumulative return of -10.33% during this period. Today’s closing price of Rs.607.55 represents the lowest level the stock has traded at in the past year, down substantially from its 52-week high of Rs.1,398. This decline contrasts with the broader market trend, as the Sensex managed to recover from an early negative opening to close marginally higher at 85,307.51, just 1% shy of its own 52-week high of 86,159.02.
Shakti Pumps has underperformed its sector, with a day change of -0.99%, which is 0.98% below the sector’s performance. The stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a sustained downward momentum over multiple time frames.
Financial Performance Overview
Over the last year, Shakti Pumps has recorded a total return of -21.00%, a stark contrast to the Sensex’s positive return of 4.34% over the same period. This divergence highlights the stock’s relative weakness within the market.
Operating cash flow for the year stands at Rs.20.49 crores, which is noted as the lowest in recent periods. Interest expenses for the quarter have risen to Rs.13.30 crores, reflecting a growth of 36.27%. The ratio of operating profit to interest expense for the quarter is at 10.22 times, marking a low point in the company’s ability to cover interest costs from operating earnings.
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Long-Term Fundamentals and Valuation Metrics
Despite recent price weakness, Shakti Pumps exhibits strong long-term fundamental characteristics. The company’s average Return on Capital Employed (ROCE) is 26.83%, indicating efficient use of capital over time. Net sales have grown at an annual rate of 40.28%, while operating profit has expanded at a rate of 93.48%, reflecting robust growth in core business operations.
The company maintains a low Debt to EBITDA ratio of 0.76 times, suggesting a manageable debt burden relative to earnings before interest, tax, depreciation, and amortisation. Additionally, the ROCE for the latest period is 31.2%, with an Enterprise Value to Capital Employed ratio of 4.3, which points to a valuation that is fair but at a premium compared to peer averages.
Profit growth over the past year has been recorded at 22.2%, even as the stock price has declined. The Price/Earnings to Growth (PEG) ratio stands at 1, indicating that profit growth and valuation are aligned on a fundamental basis.
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Shareholding and Market Position
The majority ownership of Shakti Pumps remains with promoters, which often reflects a concentrated control structure. The company operates within the Compressors, Pumps & Diesel Engines sector, a segment that has seen varied performance across peers.
While the stock’s recent price action has been subdued, the broader market environment remains positive, with mega-cap stocks leading gains and the Sensex trading above key moving averages. This divergence underscores the stock’s relative underperformance within a generally bullish market context.
Summary of Key Metrics
To summarise, Shakti Pumps (India) has reached a 52-week low of Rs.607.55 after a sustained period of price decline. The stock’s performance over the past year contrasts with the broader market, showing a negative return of 21.00% against the Sensex’s positive 4.34%. Financial indicators reveal a low operating cash flow for the year, increased interest expenses, and a reduced operating profit to interest coverage ratio. However, the company’s long-term fundamentals, including strong ROCE, sales and profit growth, and manageable debt levels, remain intact.
Investors and market watchers will note the stock’s current valuation premium relative to peers and its trading below all major moving averages, reflecting the prevailing market sentiment towards the company’s shares.
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