Recent Price Movement and Market Context
On 20 Jan 2026, Sundrop Brands Ltd’s share price declined by 1.91% during the trading session, reaching an intraday low of Rs.635, which represents the lowest level in the past 52 weeks. This drop comes after two consecutive days of losses, cumulatively resulting in a 6.51% decline over this short period. The stock’s performance today also lagged behind the edible oil sector by 0.95%, indicating relative weakness within its industry peers.
The broader market environment has been challenging as well. The Sensex opened flat but subsequently fell by 322.07 points, or 0.43%, closing at 82,885.31. This marks the third consecutive week of decline for the benchmark index, which has lost 3.35% over this period. Despite the Sensex trading below its 50-day moving average, the 50DMA remains above the 200DMA, suggesting some underlying support in the broader market. However, the index remains 3.95% shy of its 52-week high of 86,159.02.
In contrast, Sundrop Brands is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — underscoring the stock’s sustained downward momentum.
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Long-Term Performance and Financial Metrics
Over the past year, Sundrop Brands Ltd has delivered a total return of -28.28%, significantly underperforming the Sensex, which gained 7.55% during the same period. The stock’s 52-week high was Rs.959.25, highlighting the extent of the recent decline.
The company’s operating profit has contracted at an annualised rate of -67.91% over the last five years, reflecting subdued long-term growth trends. This deterioration in profitability has contributed to the stock’s downgrade from a Hold to a Sell rating on 10 Sep 2025, as per its Mojo Grade, which currently stands at 40.0.
Promoter shareholding dynamics have also added pressure. All promoter shares are pledged, and the proportion of pledged holdings has doubled over the last quarter. In a falling market, this elevated pledge level can exacerbate downward price movements due to potential forced selling.
Consistent underperformance against benchmarks is another concern. Sundrop Brands has lagged the BSE500 index in each of the last three annual periods, reinforcing the stock’s relative weakness within the broader market.
Balance Sheet and Profitability Indicators
Despite the challenges, the company maintains a low average debt-to-equity ratio of 0.04 times, indicating limited leverage on its balance sheet. This conservative capital structure may provide some financial flexibility.
Recent quarterly results have been positive, with net sales for the latest quarter reaching Rs.383.30 crore, representing a 40.6% increase compared to the previous four-quarter average. The profit after tax (PAT) for the nine-month period stands at Rs.31.14 crore, reflecting a substantial rise in profitability.
Return on equity (ROE) is modest at 2.6%, and the stock trades at a price-to-book value of 1.7, suggesting a fair valuation relative to its book value. Compared to peers, Sundrop Brands is trading at a discount to historical average valuations.
Interestingly, while the stock has declined by 28.28% over the past year, its profits have surged by 1446.1%, resulting in a very low PEG ratio of 0.1. This divergence between earnings growth and share price performance highlights the complex dynamics affecting the stock.
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Summary of Key Factors Influencing the Stock’s Decline
The stock’s fall to Rs.635, its lowest level in a year, is attributable to a combination of factors. These include sustained underperformance relative to the benchmark indices and sector peers, a significant contraction in operating profit over the long term, and the increased risk associated with fully pledged promoter holdings. The stock’s technical position below all major moving averages further signals persistent selling pressure.
While recent sales and profit growth figures have been encouraging, these have not yet translated into positive momentum in the share price. The disparity between earnings growth and stock performance may reflect market concerns about the company’s growth sustainability and valuation in the context of its historical trends.
Overall, Sundrop Brands Ltd’s current market valuation and price action reflect a cautious stance by market participants amid a challenging environment for the edible oil sector and the company’s specific financial profile.
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