Price Movement and Market Context
On the latest trading day, S.M. Gold’s share price declined by 2.71%, contrasting with the Sensex’s positive movement of 0.62%. Despite this, the stock marginally outperformed its sector by 1.54% on the day, following a brief reversal after three consecutive days of decline. However, the stock remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling persistent downward pressure.
Examining the stock’s performance over various time frames highlights a consistent pattern of underperformance. Over the past week, the stock’s value has contracted by 4.69%, while the Sensex recorded a modest gain of 0.28%. The one-month period shows a decline of 11.40% for S.M. Gold, compared to a 0.26% rise in the Sensex. The three-month figure reveals a sharper fall of 19.89%, whereas the Sensex advanced by 4.01% during the same period.
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Longer-term figures further illustrate the stock’s challenges. Over one year, S.M. Gold’s share price has declined by 37.98%, while the Sensex has appreciated by 9.50%. Year-to-date performance shows a 30.29% reduction in the stock’s value against a 9.36% gain in the benchmark index. The three-year and five-year returns for S.M. Gold stand at -38.54% and -51.20% respectively, in stark contrast to the Sensex’s 40.49% and 85.74% gains over the same periods. Notably, the stock’s ten-year return remains flat at 0.00%, while the Sensex has surged by 233.93%.
Financial Metrics and Company Fundamentals
The company’s financial indicators provide further insight into its current valuation and market position. S.M. Gold’s Return on Capital Employed (ROCE) averages at 3.50%, indicating limited efficiency in generating returns from its capital base. The company’s capacity to service debt is constrained, with a Debt to EBITDA ratio of 10.74 times, reflecting a relatively high leverage level.
Despite these factors, the company reported its highest quarterly net sales at Rs.44.69 crores in the most recent quarter. Profit before tax excluding other income reached Rs.0.52 crores, while profit after tax stood at Rs.0.43 crores, both marking quarterly highs. The ROCE for this period was recorded at 2.8, accompanied by an enterprise value to capital employed ratio of 0.8, suggesting a valuation that is comparatively attractive relative to peers’ historical averages.
However, the stock’s profitability has shown a decline of 29.9% over the past year, aligning with the downward trend in share price. The company’s majority shareholders are non-institutional, which may influence liquidity and trading dynamics.
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Sector and Industry Positioning
S.M. Gold operates within the Gems, Jewellery and Watches sector, a segment that has experienced varied performance across its constituents. The stock’s recent price action and financial metrics place it at a distinct disadvantage compared to broader market indices and many sector peers. The persistent trading below all major moving averages underscores the prevailing market sentiment and the challenges faced by the company in regaining momentum.
While the stock has shown some short-term resilience with a minor gain following a three-day decline, the overall trend remains subdued. The contrast with the Sensex’s steady appreciation over multiple time frames highlights the divergence in performance and investor confidence.
Summary of Key Data Points
To encapsulate, S.M. Gold’s stock price reached Rs.12.02, an all-time low, with a day decline of 2.71%. The stock’s performance over one year and beyond has been notably weaker than the Sensex, with returns ranging from -30.29% year-to-date to -51.20% over five years. Financially, the company’s ROCE and debt servicing ratios indicate constraints in capital efficiency and leverage management. Despite recording quarterly highs in sales and profits, the stock’s valuation and profitability metrics reflect ongoing pressures.
These factors collectively illustrate the current market position of S.M. Gold, underscoring the challenges it faces within its sector and the broader market environment.
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