Key Events This Week
23 Feb: Stock opens steady at ₹117.80 with Sensex up 0.39%
24 Feb: Sharp 4.99% decline following downgrade to Sell rating
25 Feb: Downgrade confirmed amid valuation shift; stock rebounds 3.73%
26 Feb: Stock falls 5.00% despite Sensex gains
27 Feb: Recovery with 4.18% gain; week closes at ₹114.90
Monday, 23 February: Stable Start Amid Market Gains
Shree Krishna Paper Mills began the week unchanged at ₹117.80, with negligible price movement despite the Sensex rising 0.39% to 36,817.86. Trading volume was minimal at 13 shares, indicating low investor activity ahead of the week’s key developments. The stock maintained its position near the week’s high, reflecting a neutral market stance before the rating update.
Tuesday, 24 February: Sharp Decline on Downgrade Announcement
The stock plunged 4.99% to ₹111.92 on heavy volume of 579 shares, coinciding with MarketsMOJO’s downgrade of Shree Krishna Paper Mills from Hold to Sell. This downgrade was driven by a reassessment of valuation metrics, technical indicators, and financial trends. The Sensex also declined 0.78%, but the stock’s fall was more pronounced, signalling negative investor reaction to the rating change and valuation concerns.
Wednesday, 25 February: Valuation Shift and Partial Recovery
Following the downgrade, the stock rebounded 3.73% to ₹116.09 on robust volume of 2,392 shares. The valuation grade shifted from 'very expensive' to 'expensive', with the price-to-earnings ratio at 50.11 and EV/EBITDA at 17.41. Despite this premium valuation, the stock’s partial recovery suggested some investor confidence in the company’s improving quarterly results and long-term growth potential. The Sensex gained 0.41%, closing at 36,679.75.
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Thursday, 26 February: Renewed Selling Pressure Despite Market Gains
The stock declined again by 5.00% to ₹110.29 on volume of 348 shares, contrasting with the Sensex’s modest 0.19% gain. This drop reflected ongoing caution following the downgrade and concerns over the company’s financial leverage, with a Debt to EBITDA ratio of 4.21 times and high promoter share pledge of 84.38%. Technical indicators showed a shift from bullish to mildly bullish, with mixed signals from MACD, RSI, and Bollinger Bands, contributing to investor uncertainty.
Friday, 27 February: Recovery on Market Weakness
Shree Krishna Paper Mills closed the week with a 4.18% gain to ₹114.90 on volume of 556 shares, recovering some losses as the Sensex fell 1.16%. This rebound was supported by the company’s positive quarterly results, including a 40.53% growth in net sales over six months and a 298% increase in profits over the past year. However, the stock remains down 2.46% for the week, underperforming the benchmark index’s 0.96% decline.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-23 | Rs.117.80 | +0.00% | 36,817.86 | +0.39% |
| 2026-02-24 | Rs.111.92 | -4.99% | 36,530.09 | -0.78% |
| 2026-02-25 | Rs.116.09 | +3.73% | 36,679.75 | +0.41% |
| 2026-02-26 | Rs.110.29 | -5.00% | 36,748.49 | +0.19% |
| 2026-02-27 | Rs.114.90 | +4.18% | 36,322.56 | -1.16% |
Key Takeaways
Valuation and Rating Shift: The downgrade to Sell and the shift from very expensive to expensive valuation reflect growing caution despite the stock’s premium multiples. The P/E ratio of 50.11 and EV/EBITDA of 17.41 remain elevated relative to many peers, signalling high expectations priced in by the market.
Technical Ambiguity: Mixed technical indicators, including mildly bearish weekly MACD and RSI neutrality, contributed to volatility and investor uncertainty. The stock’s price movements this week mirrored these conflicting signals.
Financial Performance: Positive quarterly results with strong sales growth and profit surge underpin the stock’s partial recovery. However, modest ROCE of 10.12% and high leverage (Debt to EBITDA 4.21x) highlight ongoing financial risks.
Promoter Pledge Risk: A high promoter pledge of 84.38% adds to the risk profile, potentially increasing selling pressure in adverse market conditions.
Market Context: The stock underperformed the Sensex this week, declining 2.46% versus the benchmark’s 0.96% fall, reflecting sector-specific challenges and company-specific concerns.
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Conclusion
Shree Krishna Paper Mills & Industries Ltd’s week was marked by a significant downgrade and valuation reassessment that weighed on its share price. While the company continues to demonstrate strong long-term returns and recent operational improvements, the elevated valuation multiples, mixed technical signals, and financial leverage concerns have introduced volatility and caution among investors. The stock’s underperformance relative to the Sensex this week underscores these challenges. Going forward, the balance between improving fundamentals and persistent risks will be critical in shaping the stock’s trajectory.
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