Stock Price Movement and Market Context
On 16 Feb 2026, Surat Trade & Merchantile Ltd’s share price slipped by 8.06% in a single session, underperforming its sector by 7.04%. This decline ended a five-day streak of consecutive gains, signalling a reversal in short-term momentum. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating sustained downward pressure.
In contrast, the broader market showed resilience on the same day. The Sensex, after opening 146.36 points lower, recovered to close 339.72 points higher at 82,820.12, up 0.23%. The index remains within 4.03% of its 52-week high of 86,159.02, supported by gains in mega-cap stocks. However, Surat Trade & Merchantile Ltd’s performance diverges sharply from this positive trend.
Over the past year, the stock has delivered a negative return of 34.08%, while the Sensex has gained 9.04%. This underperformance extends beyond the recent year, with the stock lagging the BSE500 index over one, three months, and three years.
Our latest weekly pick is live! This Large Cap from Diamond & Gold Jewellery comes with clear entry and exit targets. See the detailed report with target price now!
- - Clear entry/exit targets
- - Target price revealed
- - Detailed report available
Financial Performance and Profitability Metrics
The company’s recent quarterly results highlight a challenging environment. Net sales for the quarter stood at Rs.11.40 crores, down 39.7% compared to the previous four-quarter average. Profit after tax (PAT) declined by 8.1% to Rs.2.51 crores over the same period. Notably, non-operating income accounted for 116.72% of profit before tax, indicating reliance on income sources outside core business operations.
Surat Trade & Merchantile Ltd’s financial health is further reflected in its key ratios. The average EBIT to interest ratio is -2.25, signalling difficulties in servicing debt obligations. Return on Capital Employed (ROCE) averages at 3.15%, which is low and suggests limited profitability relative to the capital invested. These metrics contribute to the company’s current Mojo Grade of Strong Sell, upgraded from Sell on 14 Nov 2024, with a Mojo Score of 3.0.
The company’s market capitalisation grade is 4, indicating a micro-cap status within the Garments & Apparels sector. This classification often entails higher volatility and risk compared to larger peers.
Valuation and Risk Considerations
The stock’s valuation appears stretched relative to its historical averages. Negative EBITDA and declining profits, which have fallen by 22.8% over the past year, underscore the risk profile. The stock’s 52-week high was Rs.7.53, nearly 81% above the current price, highlighting the extent of the decline.
Promoters remain the majority shareholders, maintaining control over the company’s strategic direction. However, the weak long-term fundamental strength and the inability to generate consistent returns have weighed on investor sentiment and share price performance.
Surat Trade & Merchantile Ltd or something better? Our SwitchER feature analyzes this micro-cap Garments & Apparels stock and recommends superior alternatives based on fundamentals, momentum, and value!
- - SwitchER analysis complete
- - Superior alternatives found
- - Multi-parameter evaluation
Sector and Industry Context
Operating within the Garments & Apparels sector, Surat Trade & Merchantile Ltd faces competitive pressures and market dynamics that have impacted its sales and profitability. The sector itself has seen mixed performance, with some companies benefiting from export demand and others grappling with input cost inflation and subdued domestic consumption.
Despite the broader market’s positive trajectory, the company’s stock has not mirrored this trend, reflecting company-specific challenges and valuation concerns.
Summary of Key Metrics
To summarise, Surat Trade & Merchantile Ltd’s stock has reached a new 52-week low of Rs.4.16, down from a high of Rs.7.53 within the last year. The stock’s one-year return stands at -34.08%, contrasting with the Sensex’s 9.04% gain. Quarterly net sales and PAT have declined significantly, while non-operating income has become a substantial component of profitability. The company’s financial ratios indicate weak debt servicing capacity and low returns on capital.
Trading below all major moving averages and with a Mojo Grade of Strong Sell, the stock’s current valuation and performance metrics reflect ongoing challenges within the company and its sector.
Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →
