Recent Price Movement and Market Context
The stock has been on a declining trajectory for four consecutive trading days, resulting in a cumulative return of -8.96% during this period. Today’s fall of 4.06% further extended its underperformance relative to the sector, which outpaced Super Tannery by 3.12%. This downward momentum has pushed the share price below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a persistent bearish trend.
In contrast, the broader market has shown resilience. The Sensex opened 274.98 points higher and is currently trading at 84,958.57, reflecting a 0.56% gain. The index remains close to its 52-week high of 86,159.02, trading above its 50-day moving average, which itself is positioned above the 200-day moving average. Mega-cap stocks are leading the market rally, highlighting a divergence between Super Tannery’s performance and the overall market sentiment.
Long-Term Performance and Valuation Metrics
Over the past year, Super Tannery’s stock has recorded a return of -50.20%, significantly lagging behind the Sensex’s 7.25% gain during the same timeframe. The stock’s 52-week high was Rs.12.89, indicating that the current price represents a decline of more than 50% from that peak.
From a valuation standpoint, the company exhibits a return on capital employed (ROCE) averaging 7.13% over the long term, which is considered modest within its sector. Net sales have shown a compound annual growth rate of 11.11% over the last five years, while operating profit has grown at an annual rate of 14.65%. Despite these growth figures, the company’s ability to service its debt remains constrained, with a Debt to EBITDA ratio of 3.39 times, reflecting a relatively high leverage position.
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Quarterly Financial Indicators
The company’s recent quarterly results reflect subdued performance. Profit after tax (PAT) for the quarter stood at Rs.0.69 crore, representing a decline of 64.9% compared to the average of the previous four quarters. Net sales for the quarter were recorded at Rs.62.15 crore, the lowest in recent periods. Profit before tax excluding other income (PBT less OI) also reached a low of Rs.0.53 crore, underscoring the challenges faced in maintaining profitability.
Comparative Performance and Market Position
Super Tannery’s performance over the last three years, one year, and three months has been below the benchmark BSE500 index, indicating consistent underperformance relative to a broad market measure. Despite this, the company’s valuation metrics suggest a very attractive enterprise value to capital employed ratio of 0.8, which is below the average for its peers. The return on capital employed for the most recent period is noted at 8.3%, which, while modest, contributes to the valuation discount.
Profit growth over the past year has been recorded at 23.5%, and the price/earnings to growth (PEG) ratio stands at 0.4, indicating that the stock is trading at a valuation level that is low relative to its earnings growth rate. Majority ownership remains with the promoters, maintaining a stable shareholding structure.
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Sector and Industry Context
Operating within the diversified consumer products sector, Super Tannery faces a competitive environment where market leaders have maintained stronger momentum. The sector itself has seen mixed performance, with larger-cap companies driving gains in the broader market indices. Super Tannery’s relative valuation discount and subdued financial metrics highlight the challenges it faces in aligning with sector growth trends.
Summary of Key Financial and Market Data
To summarise, Super Tannery’s stock price has reached Rs.5.95, its lowest level in the past 52 weeks, following a series of declines over recent days. The stock’s underperformance contrasts with the broader market’s positive trend, as reflected by the Sensex’s proximity to its 52-week high and gains led by mega-cap stocks. Financial indicators reveal modest growth in sales and operating profit over the long term, but recent quarterly results show contraction in profitability and sales volumes. The company’s leverage remains elevated, with a Debt to EBITDA ratio of 3.39 times, while valuation metrics suggest the stock is trading at a discount relative to peers.
These factors collectively illustrate the current position of Super Tannery within the market and its sector, reflecting a period of subdued performance and valuation adjustment.
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