Price Movement and Market Context
On the latest trading day, S.M. Gold recorded a modest gain of 0.62%, outperforming the Sensex, which declined by 0.46%. Despite this short-term uptick, the stock’s price remains below its 20-day, 50-day, 100-day, and 200-day moving averages, though it is positioned above the 5-day moving average. This suggests some near-term price support but continued pressure over longer time horizons.
Over the past week, the stock has declined by 2.75%, while the Sensex showed a smaller fall of 0.26%. The one-month trend reveals a sharper decline of 8.98%, contrasting with a 0.37% rise in the Sensex. The three-month performance shows a 13.95% reduction in S.M. Gold’s share price, whereas the Sensex gained 3.78% during the same period.
Longer-term figures highlight the extent of the stock’s challenges. Over the last year, S.M. Gold’s share price has fallen by 39.81%, in stark contrast to the Sensex’s 3.34% appreciation. Year-to-date, the stock has declined by 25.26%, while the Sensex has advanced by 8.62%. The three-year and five-year performances show declines of 38.74% and 47.68% respectively, compared to Sensex gains of 37.34% and 83.47%. Over a decade, the stock’s price has remained flat, while the Sensex surged by 235.21%.
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Financial Metrics and Valuation
S.M. Gold’s financial indicators reflect ongoing pressures. The company’s average Return on Capital Employed (ROCE) stands at 3.50%, indicating limited efficiency in generating returns from its capital base. The Debt to EBITDA ratio is notably high at 10.74 times, signalling a constrained capacity to service debt obligations relative to earnings before interest, taxes, depreciation, and amortisation.
Despite these challenges, the company reported its highest quarterly net sales at ₹44.69 crores in the most recent period. Profit before tax excluding other income reached ₹0.52 crores, while profit after tax was ₹0.43 crores, both representing peak quarterly figures for the company. The ROCE for this quarter was 2.8, accompanied by an enterprise value to capital employed ratio of 0.9, which suggests a valuation discount relative to historical peer averages.
However, the profit figures have shown a decline of 29.9% over the past year, aligning with the downward trend in share price. The stock’s consistent underperformance against the BSE500 index over the last three annual periods further underscores the challenges faced by the company in delivering shareholder value.
Shareholding and Sector Position
The majority of S.M. Gold’s shares are held by non-institutional investors, reflecting a shareholder base that is less dominated by large financial entities. The company operates within the Gems, Jewellery And Watches sector, which has seen varied performance across its constituents. Relative to its sector peers, S.M. Gold’s valuation metrics indicate a discount, though this is accompanied by subdued financial returns and elevated leverage ratios.
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Recent Price Trends and Technical Indicators
The stock’s recent price action shows a break in a four-day consecutive decline, with a slight gain recorded on the latest session. This short-term reversal, however, remains within a broader downtrend as evidenced by the stock trading below its longer-term moving averages. The 5-day moving average currently lies below the stock price, while the 20-day, 50-day, 100-day, and 200-day averages remain above, indicating resistance levels that the stock has yet to overcome.
Relative to the sector, S.M. Gold outperformed by 3.23% on the day it hit its all-time low, suggesting some resilience in the face of broader sector movements. Nonetheless, the prevailing trend over weeks and months continues to reflect downward pressure.
Summary of Performance Against Benchmarks
When compared to the Sensex and BSE500 indices, S.M. Gold’s performance has been consistently below par. The stock’s negative returns over one, three, and five years contrast sharply with the positive returns of these benchmarks. This persistent gap highlights the stock’s relative weakness within the broader market context.
While the company has recorded some positive quarterly sales and profit figures, these have not translated into sustained share price appreciation or improved long-term financial metrics. The elevated leverage and modest returns on capital further complicate the valuation picture.
Conclusion
S.M. Gold’s descent to an all-time low price of ₹12.02 reflects a combination of subdued financial performance, high leverage, and persistent underperformance relative to market benchmarks. The stock’s recent price movements show minor short-term gains but remain within a longer-term downtrend. Investors and market participants will note the company’s discounted valuation relative to peers, alongside its challenges in generating robust returns and managing debt levels.
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