Surat Trade & Merchantile Ltd Falls to 52-Week Low of Rs.4.4 Amidst Continued Weakness

Stock Price Movement and Market Context

On 12 Jan 2026, Surat Trade & Merchantile Ltd’s share price declined by 4.74% during the trading session, closing at Rs.4.4, the lowest level recorded in the past year. This drop extends a two-day losing streak, during which the stock has fallen by 6.44%. The stock’s performance today notably underperformed the Garments & Apparels sector by 2.97%, signalling relative weakness within its industry peer group.

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 a sustained bearish trend. This technical positioning suggests that short- to long-term momentum remains subdued.

In contrast, the broader market benchmark, the Sensex, opened slightly lower at 83,435.31 points, down 0.17%, and was trading near 83,541.55 points at the time of reporting. The Sensex remains within 3.13% of its 52-week high of 86,159.02, with its 50-day moving average positioned above the 200-day moving average, reflecting a generally more stable market environment compared to the stock’s performance.

Financial Performance and Profitability Concerns

Surat Trade & Merchantile Ltd’s financial results reveal several areas of concern that have contributed to the stock’s decline. The company reported a quarterly Profit After Tax (PAT) of Rs.0.27 crore, representing a sharp fall of 92.7% compared to the average of the previous four quarters. This steep decline in profitability is a key factor weighing on investor sentiment.

Net sales for the quarter stood at Rs.16.67 crore, down 19.7% relative to the prior four-quarter average, indicating a contraction in revenue generation. Meanwhile, non-operating income accounted for 300% of the Profit Before Tax (PBT), highlighting an unusual reliance on income sources outside the core business operations.

The company’s earnings before interest and tax (EBIT) to interest ratio averaged -2.25, signalling difficulties in servicing debt obligations. This weak coverage ratio underscores the financial strain faced by the company in managing its liabilities.

Return on Capital Employed (ROCE) averaged 3.15%, reflecting low profitability relative to the total capital invested, which includes both equity and debt. This figure points to limited efficiency in generating returns from the company’s capital base.

Valuation and Risk Profile

The stock’s valuation metrics have deteriorated over the past year, with returns declining by 37.90%, significantly underperforming the Sensex’s positive 8.03% return over the same period. Profitability has also contracted by 22.8%, compounding concerns about the company’s earnings quality and growth prospects.

Surat Trade & Merchantile Ltd’s Moody’s Mojo Score currently stands at 3.0, with a Mojo Grade of Strong Sell, upgraded from a previous Sell rating on 14 Nov 2024. This grading reflects the company’s weak long-term fundamental strength and heightened risk profile.

Additionally, the stock has consistently underperformed the BSE500 index over the last three annual periods, reinforcing a pattern of relative weakness compared to broader market benchmarks.

The company’s negative EBITDA further accentuates the risk associated with the stock, as it indicates earnings before interest, tax, depreciation, and amortisation are insufficient to cover operating expenses.

Shareholding and Industry Position

Promoters remain the majority shareholders of Surat Trade & Merchantile Ltd, maintaining significant control over the company’s strategic direction. The firm operates within the Garments & Apparels sector, which has experienced mixed performance trends, but Surat Trade’s relative underperformance has been notable.

Summary of Key Metrics

To summarise, Surat Trade & Merchantile Ltd’s stock has reached a 52-week low of Rs.4.4, reflecting a sustained decline driven by weak financial results and valuation pressures. The company’s quarterly PAT has plummeted by over 90%, while net sales have contracted nearly 20%. Its ability to service debt remains constrained, as evidenced by a negative EBIT to interest ratio. The stock’s performance trails both its sector and the broader market, with a Strong Sell Mojo Grade underscoring the challenges faced.

While the Sensex maintains a relatively stable position near its 52-week high, Surat Trade’s share price and fundamentals continue to reflect a cautious outlook within the Garments & Apparels sector.

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