Stock Price Movement and Market Context
On 25 Nov 2025, Surat Trade & Merchantile's share price touched Rs.5.37, the lowest level recorded in the past year. This price point contrasts sharply with its 52-week high of Rs.8.78, reflecting a substantial reduction in market valuation over the period. Despite this, the stock outperformed its sector by 1.16% on the day, although it remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning indicates sustained downward pressure on the stock price relative to its recent trading history.
Meanwhile, the broader market environment shows resilience. The Sensex opened higher at 85,008.93 points, registering a gain of 108.22 points (0.13%) before trading slightly lower at 84,954.84 points (0.06%). The index is approximately 1% below its 52-week high of 85,801.70 points and is supported by bullish technical indicators, with the 50-day moving average positioned above the 200-day moving average. Mid-cap stocks are leading the market gains, with the BSE Mid Cap index rising by 0.14% on the same day.
Financial Performance Overview
Surat Trade & Merchantile's financial metrics over the past year reveal challenges in maintaining profitability and growth. The company’s one-year stock return stands at -36.34%, contrasting with the Sensex’s positive return of 6.04% over the same period. This underperformance is consistent with the company’s financial results, which show a decline in key earnings indicators.
Quarterly figures indicate a Profit After Tax (PAT) of Rs.0.27 crore, representing a fall of 92.7% compared to the previous four-quarter average. Net sales for the quarter were Rs.16.67 crore, down by 19.7% relative to the prior four-quarter average. Notably, non-operating income accounted for 300% of the Profit Before Tax (PBT), suggesting that core business activities are under strain and that other income sources are currently a significant contributor to profitability.
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Profitability and Debt Servicing Concerns
The company’s ability to service its debt appears limited, with an average EBIT to interest ratio of -2.25, indicating that earnings before interest and tax are insufficient to cover interest expenses. This ratio reflects a challenging financial position in terms of meeting debt obligations from operational earnings.
Return on Capital Employed (ROCE) averages at 3.15%, signalling low profitability relative to the total capital invested in the business, including both equity and debt. This level of return suggests that the company is generating modest returns on its capital base, which may be a factor in the subdued investor sentiment reflected in the stock price.
Valuation and Risk Profile
Surat Trade & Merchantile’s stock is considered risky when compared to its historical valuation averages. Over the past year, profits have declined by 22.8%, further contributing to the negative return of 36.34% in the stock price. The company has consistently underperformed the BSE500 benchmark index over the last three annual periods, highlighting a trend of relative weakness in comparison to the broader market.
The stock’s trading below all major moving averages reinforces the view of sustained downward momentum. This technical positioning often reflects investor caution and a lack of upward price catalysts in the near term.
Shareholding and Industry Position
The majority shareholding in Surat Trade & Merchantile is held by promoters, which may influence strategic decisions and company direction. The company operates within the Garments & Apparels industry, a sector that has shown mixed performance in recent times, with some mid-cap peers demonstrating resilience while others face headwinds.
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Summary of Recent Trends
In summary, Surat Trade & Merchantile’s stock has reached a significant low point in its 52-week trading range, reflecting a combination of subdued financial performance and market valuation pressures. The company’s quarterly results show marked declines in profitability and sales, while its debt servicing capacity remains constrained. These factors have contributed to the stock’s underperformance relative to the Sensex and its sector peers.
While the broader market exhibits strength, with the Sensex near its yearly highs and mid-cap stocks leading gains, Surat Trade & Merchantile’s share price continues to face downward pressure. The stock’s position below all key moving averages and its negative returns over the past year underscore the challenges faced by the company in regaining investor confidence.
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