Stock Performance and Market Context
The stock price of Suncity Synthetics Ltd has been on a downward trajectory, falling by 4.93% today and underperforming its sector by 5.01%. This marks the third consecutive day of losses, with the stock declining by 14.14% over this period. Notably, the stock did not trade on one of the last 20 trading days, indicating some irregularity in liquidity or trading interest.
Currently, Suncity Synthetics is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling a bearish technical setup. This contrasts with the broader market, where the Sensex opened lower at 84,620.40, down 0.52%, but remains close to its 52-week high of 86,159.02, just 1.41% away. The Sensex is trading above its 50-day moving average, which itself is above the 200-day moving average, indicating a generally bullish market environment. Mid-cap stocks are leading gains with the BSE Mid Cap index up 0.47% today.
Over the past year, Suncity Synthetics has delivered a negative return of 45.18%, starkly underperforming the Sensex’s positive 8.65% return. The stock’s 52-week high was Rs.24.13, highlighting the steep decline it has experienced.
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Financial Health and Fundamental Concerns
Suncity Synthetics Ltd’s financial metrics reveal several areas of concern. The company carries a negative book value, indicating weak long-term fundamental strength. Over the last five years, net sales have declined at an annualised rate of 37.82%, while operating profit has remained flat at 0%. This lack of growth has contributed to the company’s deteriorating financial position.
The company is classified as highly leveraged, with an average debt-to-equity ratio of zero, which in this context reflects a high debt burden relative to equity, compounded by negative net worth. The firm has reported losses and negative net worth, signalling the need for either fresh capital infusion or a return to profitability to maintain financial viability.
Recent half-year results showed a return on capital employed (ROCE) at a low of -47.62%, while cash and cash equivalents stood at a minimal Rs.0.01 crore, underscoring liquidity constraints. The company’s earnings before interest, taxes, depreciation and amortisation (EBITDA) remain negative, adding to the risk profile of the stock.
Valuation and Market Risk
The stock is trading at valuations that are considered risky relative to its historical averages. Despite the negative stock returns of 45.18% over the past year, the company’s profits have increased by 45%, resulting in a price/earnings to growth (PEG) ratio of 0.5. This disparity suggests that the market has not rewarded the profit growth, possibly due to concerns over sustainability and balance sheet strength.
In comparison, the broader BSE500 index has generated a positive return of 7.21% over the same period, highlighting the stock’s significant underperformance relative to the market.
Institutional Investor Activity
One notable development is the increased participation by institutional investors, who have raised their stake by 2.76% over the previous quarter, now collectively holding 9.03% of the company. Institutional investors typically possess greater resources and analytical capabilities to assess company fundamentals, which may influence market dynamics around the stock.
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Summary of Key Metrics
Suncity Synthetics Ltd currently holds a Mojo Score of 12.0 and a Mojo Grade of Strong Sell, as of 13 Aug 2025, reflecting the company’s challenging outlook. The market capitalisation grade stands at 4, indicating a relatively small market cap. The stock’s recent price action and fundamental data underscore the difficulties faced by the company within the Garments & Apparels sector.
While the broader market environment remains positive, with the Sensex trading near its 52-week high and mid-cap stocks leading gains, Suncity Synthetics Ltd’s performance remains subdued. The stock’s fall to Rs.12.33, its lowest level in a year, highlights the ongoing pressures and the cautious stance reflected in its valuation and trading patterns.
Conclusion
The decline of Suncity Synthetics Ltd to its 52-week low of Rs.12.33 is a reflection of persistent financial and market challenges. The company’s negative book value, flat sales growth, losses, and liquidity constraints have contributed to its underperformance relative to the broader market and sector peers. Despite increased institutional interest, the stock remains below all major moving averages and has experienced significant price erosion over the past year. These factors collectively illustrate the current state of the company’s market standing and financial health.
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