Key Events This Week
16 Feb: Downgrade to Strong Sell amid weak financials and bearish technicals
16 Feb: Bearish momentum confirmed by multiple technical indicators
17 Feb: Technical momentum shifts to mildly bearish with mixed signals
18 Feb: Bearish technical shift amid mixed momentum signals
20 Feb: Week closes at Rs.901.10, down 2.66%
16 February 2026: Downgrade to Strong Sell Amid Weak Financials
On the first trading day of the week, Sudarshan Chemical Industries Ltd was downgraded by MarketsMOJO from a Sell to a Strong Sell rating, reflecting a significant deterioration in both financial and technical parameters. The company’s Mojo Score dropped to 26.0, signalling heightened caution. The downgrade was driven by persistent financial weakness, including four consecutive quarters of negative earnings and a net loss of ₹69.90 crores in Q3 FY25-26, representing a 1909.7% decline from the previous period.
The stock closed at Rs.915.30, down 1.13% from the previous close, despite the Sensex gaining 0.70%. Operating profit contracted at an annualised rate of -4.15% over five years, and the interest coverage ratio fell to a precarious 1.04 times, with interest expenses rising 22.96% to ₹80.00 crores in six months. Return on Capital Employed (ROCE) remained low at 5%, indicating limited capital efficiency. The stock’s valuation, trading at an enterprise value to capital employed ratio of 1.8, was discounted relative to peers but failed to offset the negative sentiment.
Technical Momentum Confirms Bearish Outlook
Technical indicators on 16 February reinforced the bearish outlook. The Moving Average Convergence Divergence (MACD) was bearish on the weekly chart and mildly bearish monthly, while daily moving averages turned negative. Bollinger Bands suggested increased volatility with downward pressure, and the Know Sure Thing (KST) indicator was bearish weekly and mildly bearish monthly. The Relative Strength Index (RSI) remained neutral, and On-Balance Volume (OBV) showed mild weekly bullishness but neutral monthly volume trends.
The stock’s intraday range was volatile, with a low of Rs.849.05 and a high of Rs.938.00, closing at Rs.927.75. This price action reflected the technical uncertainty and increased selling pressure. Institutional investors maintained a 32.81% stake, indicating some confidence despite the challenges.
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17 February 2026: Technical Momentum Shifts to Mildly Bearish
The following day, Sudarshan Chemical’s technical momentum showed signs of subtle change. The stock closed at Rs.919.05, up 0.41% from the previous day, while the Sensex gained 0.32%. Despite this modest gain, the overall technical trend shifted from bearish to mildly bearish, reflecting a potential stabilisation but no clear recovery.
The weekly MACD turned mildly bullish, suggesting some short-term positive momentum, but the monthly MACD remained mildly bearish. RSI readings stayed neutral, indicating no clear overbought or oversold conditions. Bollinger Bands continued to show bearish pressure weekly and mildly bearish monthly. Daily moving averages remained bearish, with the stock trading below key averages. The KST oscillator was mildly bullish weekly but mildly bearish monthly, and Dow Theory showed no clear weekly trend but a mildly bearish monthly stance.
Volume trends were mixed, with OBV showing no clear weekly trend and mildly bearish monthly signals. The stock’s price range was between Rs.887.00 and Rs.920.00, closing at Rs.916.00, still well below its 52-week high of Rs.1,604.00 but comfortably above the 52-week low of Rs.795.75.
18 February 2026: Bearish Technical Shift Amid Mixed Momentum
On 18 February, the stock closed slightly higher at Rs.917.55, up 0.38%, while the Sensex rose 0.43%. However, the technical trend deteriorated from mildly bearish back to outright bearish. The downgrade to Strong Sell remained in effect, with the Mojo Score at 26.0 and Market Cap Grade low at 3.
The weekly MACD was mildly bullish, but the monthly MACD stayed mildly bearish, indicating conflicting momentum signals. RSI remained neutral, while Bollinger Bands and daily moving averages confirmed a bearish bias. The KST indicator was mildly bullish weekly but mildly bearish monthly, and Dow Theory analysis showed a mildly bearish monthly trend. OBV was mildly bearish on both weekly and monthly charts, supporting the downward momentum.
Despite a modest gain on the day, the stock remained far below its 52-week high, reflecting ongoing challenges. The dyes and pigments sector’s cyclical pressures and raw material cost volatility likely contributed to the cautious technical stance.
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19 February 2026: Minor Recovery Amid Sensex Decline
On 19 February, Sudarshan Chemical closed at Rs.919.90, up 0.26%, while the Sensex declined sharply by 1.45%. This divergence suggested some relative resilience in the stock despite broader market weakness. However, volume was lower at 1,745 shares, indicating limited conviction behind the move. Technical indicators remained cautious, with no significant shift in momentum.
20 February 2026: Sharp Decline Caps Off the Week
The week ended with a notable decline on 20 February, as the stock fell 2.04% to close at Rs.901.10, underperforming the Sensex’s 0.41% gain. Volume remained subdued at 1,747 shares. This drop reinforced the bearish technical outlook and the challenges posed by weak financials and sectoral headwinds. The stock’s price remains significantly below its 52-week high, underscoring the cautious market sentiment.
| Date | Stock Price | Day Change | Sensex | Day Change |
|---|---|---|---|---|
| 2026-02-16 | Rs.915.30 | -1.13% | 36,787.89 | +0.70% |
| 2026-02-17 | Rs.919.05 | +0.41% | 36,904.38 | +0.32% |
| 2026-02-18 | Rs.917.55 | -0.16% | 37,062.35 | +0.43% |
| 2026-02-19 | Rs.919.90 | +0.26% | 36,523.88 | -1.45% |
| 2026-02-20 | Rs.901.10 | -2.04% | 36,674.32 | +0.41% |
Key Takeaways
Financial Weakness: The company’s sustained losses, negative earnings trend, and rising interest expenses continue to weigh heavily on investor sentiment.
Technical Deterioration: A downgrade to Strong Sell and bearish momentum across key indicators such as MACD, moving averages, and Bollinger Bands signal increased downside risk.
Mixed Momentum Signals: While some short-term indicators showed mild bullishness midweek, the overall trend remains bearish with volume trends supporting the negative outlook.
Underperformance vs Sensex: The stock declined 2.66% over the week, significantly underperforming the Sensex’s 0.39% gain, reflecting sectoral and company-specific challenges.
Conclusion
Sudarshan Chemical Industries Ltd’s week was characterised by a clear shift towards caution and risk aversion. The downgrade to Strong Sell, combined with weak financial results and bearish technical indicators, overshadowed any short-term stabilisation attempts. The stock’s underperformance relative to the Sensex highlights the challenges it faces amid sectoral pressures and internal financial strain. Investors should remain vigilant and monitor upcoming financial disclosures and technical developments closely, as the current environment suggests limited near-term upside and elevated downside risk.
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