Stock Performance and Market Context
The stock has been under pressure, falling by 4.98% on the day and underperforming its sector by 3.84%. This marks the second consecutive day of losses, with the stock declining by 9.71% over this period. Notably, trading activity has been somewhat erratic, with the stock not trading on one of the last 20 sessions. Suncity Synthetics is currently trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained downward momentum.
On the broader market front, the Sensex opened flat but slipped by 671.37 points, or 0.78%, closing at 81,664.57. The index is trading below its 50-day moving average, although the 50DMA remains above the 200DMA, indicating mixed technical signals. Additionally, the NIFTY REALTY index also hit a new 52-week low today, reflecting sectoral pressures in the market.
Over the past year, Suncity Synthetics has delivered a negative return of 46.84%, starkly contrasting with the Sensex’s positive 6.72% gain. The stock’s 52-week high was Rs.20.35, underscoring the extent of the recent decline.
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Fundamental Weaknesses Underpinning the Decline
Suncity Synthetics’ financial profile reveals several areas of concern. The company currently holds a negative book value, reflecting weak long-term fundamental strength. Over the past five years, net sales have contracted at an annualised rate of 37.82%, while operating profit has remained flat, indicating stagnation in core business performance.
Debt metrics also raise caution. Despite a reported average debt-to-equity ratio of zero, the company’s financial health is undermined by losses and negative net worth. This situation suggests the company may need to raise fresh capital or return to profitability to maintain financial viability.
Recent half-year results for September 2025 showed flat performance, with a return on capital employed (ROCE) at a low of -47.62%. Cash and cash equivalents stood at a minimal Rs.0.01 crore, highlighting liquidity constraints. Furthermore, the company reported negative EBITDA, adding to the risk profile.
Valuation and Investor Sentiment
The stock’s valuation appears risky relative to its historical averages. Despite the negative price performance, the company’s profits have increased by 45% over the past year, resulting in a price/earnings-to-growth (PEG) ratio of 0.4. This disparity between earnings growth and stock price suggests market scepticism about the sustainability of earnings improvements.
Institutional investor participation has also declined, with a 2.76% reduction in stake over the previous quarter. Currently, institutional investors hold 6.27% of the company’s shares. Given their analytical resources, this reduction may reflect concerns about the company’s fundamentals and outlook.
Long-term performance remains below par, with the stock underperforming the BSE500 index over the last three years, one year, and three months. This persistent underperformance underscores the challenges faced by Suncity Synthetics in regaining investor confidence.
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Mojo Score and Ratings
MarketsMOJO assigns Suncity Synthetics a Mojo Score of 12.0, categorising it as a Strong Sell. This rating was introduced on 13 August 2025, marking a downgrade from its previous ungraded status. The company’s market cap grade stands at 4, reflecting its relatively modest market capitalisation within the Garments & Apparels sector.
The Strong Sell rating is driven by the company’s negative book value, weak long-term growth, flat operating profit, and high financial risk. These factors collectively weigh on the stock’s outlook and contribute to its recent price decline.
Summary of Key Metrics
To summarise, Suncity Synthetics Ltd’s stock has reached a new 52-week low of Rs.10.69, reflecting ongoing challenges. The stock’s 1-year return of -46.84% contrasts sharply with the Sensex’s 6.72% gain. The company’s financials reveal negative net worth, flat sales growth, negative ROCE, and minimal cash reserves. Institutional investors have reduced their holdings, and the stock trades below all major moving averages.
These factors combine to create a cautious environment around the stock, as reflected in its Strong Sell Mojo Grade and subdued market performance.
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