Surat Trade & Merchantile Falls to 52-Week Low of Rs.5.38 Amidst Continued Downtrend

Price Movement and Market Context

On 24 Nov 2025, Surat Trade & Merchantile’s share price touched Rs.5.38, the lowest level in the past year. This decline followed two consecutive days of gains, signalling a reversal in short-term trend. The stock’s day change registered a fall of 5.11%, underperforming the Garments & Apparels sector by 3.88%. Notably, the share price is trading below its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, indicating a sustained bearish trend across multiple timeframes.

In comparison, the broader market index, Sensex, opened positively with an 88.12-point gain but later retreated by 419.33 points, closing at 84,900.71, down 0.39%. Despite this dip, Sensex remains close to its 52-week high of 85,801.70, trading 1.06% below that peak and maintaining a bullish stance above its 50-day and 200-day moving averages.

Financial Performance Highlights

Surat Trade & Merchantile’s financial indicators over recent quarters reveal challenges in revenue and profitability. The company’s quarterly net sales stood at Rs.16.67 crores, reflecting a decline of 19.7% compared to the previous four-quarter average. Profit after tax (PAT) for the quarter was Rs.0.27 crores, showing a sharp reduction of 92.7% relative to the same period’s average.

Non-operating income accounted for 300% of the profit before tax (PBT), suggesting that earnings are significantly influenced by income sources outside the core business operations. This reliance on non-operating income may point to volatility in the company’s earnings profile.

Long-Term Performance and Valuation

Over the past year, Surat Trade & Merchantile’s stock price has declined by 37.22%, contrasting with the Sensex’s positive return of 7.31% during the same period. This underperformance extends beyond a single year, as the stock has lagged behind the BSE500 index in each of the last three annual periods.

The company’s return on capital employed (ROCE) averaged 3.15%, indicating modest profitability relative to the total capital invested. Additionally, the EBIT to interest coverage ratio averaged -2.25, reflecting difficulties in servicing debt obligations from operating earnings. Negative earnings before interest, tax, depreciation and amortisation (EBITDA) further underline the financial pressures faced by the company.

Sector and Shareholding Overview

Surat Trade & Merchantile operates within the Garments & Apparels industry, a sector that has experienced mixed performance amid broader market fluctuations. The company’s majority shareholding remains with promoters, maintaining concentrated ownership control.

Summary of Key Concerns

The stock’s fall to Rs.5.38 marks a significant low point within a year characterised by declining sales and profits. The company’s financial metrics suggest constrained profitability and challenges in covering interest expenses from operating earnings. The reliance on non-operating income for profitability adds an element of uncertainty to earnings stability.

Trading below all major moving averages and underperforming its sector peers, Surat Trade & Merchantile’s current market position reflects a cautious environment for the stock. The contrast with the broader market’s relative strength highlights the stock’s divergence from general market trends.

Technical and Market Positioning

From a technical perspective, the stock’s position below short-, medium-, and long-term moving averages signals a bearish trend. The recent reversal after two days of gains suggests that upward momentum has not been sustained. This technical setup may influence trading behaviour and market sentiment in the near term.

Meanwhile, the Sensex’s proximity to its 52-week high and its bullish moving average alignment indicate a more positive market environment overall, contrasting with the stock’s individual performance.

Conclusion

Surat Trade & Merchantile’s decline to a 52-week low of Rs.5.38 encapsulates a year of financial and market challenges. The company’s subdued sales, sharply reduced profits, and unfavourable debt servicing metrics contribute to the current valuation pressures. While the broader market maintains a relatively positive stance, the stock’s performance remains subdued within its sector and against benchmark indices.

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