Recent Price Movement and Market Context
On 20 Jan 2026, Sheela Foam’s share price touched Rs.532.7, the lowest level recorded in the past 52 weeks and since its listing. This new low comes after a four-day consecutive decline, during which the stock lost 6.4% in value. The day’s trading saw the stock underperform its Furniture, Home Furnishing sector by 1.18%, continuing a trend of relative weakness.
The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. This technical positioning indicates a lack of short- and long-term price support levels, which has contributed to the recent slide.
In comparison, the broader market index, Sensex, opened flat but declined by 335.12 points (-0.45%) to close at 82,872.26. Despite this drop, Sensex remains approximately 3.97% below its 52-week high of 86,159.02. The index has experienced a three-week consecutive fall, losing 3.37% over this period, reflecting a cautious market environment.
Long-Term Performance and Relative Underperformance
Sheela Foam’s stock has underperformed significantly over the past year, delivering a negative return of 42.96%, in stark contrast to the Sensex’s positive 7.50% gain during the same period. The stock’s 52-week high was Rs.951.5, highlighting the extent of the decline from its peak.
This underperformance extends beyond the last year, with the company consistently lagging behind the BSE500 benchmark over the past three annual periods. Such sustained relative weakness underscores ongoing difficulties in regaining investor confidence and market traction.
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Fundamental Metrics and Financial Health
Sheela Foam’s fundamental profile has shown signs of strain over recent years. The company’s operating profits have declined at a compound annual growth rate (CAGR) of -16.57% over the last five years, indicating a contraction in core earnings capacity. This trend has contributed to a downgrade in its Mojo Grade from Sell to Strong Sell as of 6 Nov 2025, with a current Mojo Score of 17.0.
Profitability metrics remain subdued. The average Return on Equity (ROE) stands at 9.36%, reflecting modest returns generated on shareholders’ funds. Additionally, the company has reported negative net profits for nine consecutive quarters, with the profit after tax (PAT) for the first nine months of the current fiscal year declining by 43.93% to Rs.42.60 crores.
Return on Capital Employed (ROCE) is notably low at 1.63% for the half-year period, signalling limited efficiency in generating returns from capital investments. The inventory turnover ratio is also at a low 0.93 times, suggesting slower movement of stock and potential working capital inefficiencies.
Valuation and Institutional Holding
Despite the weak financial performance, Sheela Foam’s valuation metrics present a contrasting picture. The company’s ROCE of 2.3 and an enterprise value to capital employed ratio of 1.7 indicate a very attractive valuation relative to its capital base. The stock is trading at a discount compared to the average historical valuations of its peers in the Furniture, Home Furnishing sector.
Institutional investors hold a significant stake of 24.57% in the company. These investors typically possess greater analytical resources and a longer-term perspective on company fundamentals, which may influence trading dynamics and valuation assessments.
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Summary of Key Performance Indicators
Over the past year, Sheela Foam’s stock price has declined by 42.96%, while profits have fallen by 42.5%. The company’s consistent negative quarterly results and subdued profitability ratios have contributed to its current market position. The stock’s recent trading below all major moving averages further emphasises the prevailing downtrend.
In contrast, the Sensex has maintained a positive trajectory over the same period, underscoring the stock’s relative underperformance. The company’s market capitalisation grade remains low at 3, reflecting its modest size and valuation challenges within the sector.
Overall, Sheela Foam Ltd.’s stock performance and financial metrics illustrate a period of considerable difficulty, with the share price reflecting these underlying factors through its recent 52-week low.
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