Recent Price Movement and Market Context
On the trading day, Universal Starch Chem Allied Ltd’s shares fell by 10.46%, touching an intraday low of Rs.109.6. This decline extended a losing streak spanning five consecutive sessions, during which the stock has depreciated by 18.48%. The stock’s performance notably lagged behind the Other Agricultural Products sector, underperforming by 11.43% on the day.
In comparison, the Sensex opened higher at 82,459.66 points, gaining 0.67% but later retreated slightly to 82,263.57 points, still up 0.43% on the day. Despite the Sensex’s modest gains, it remains 4.74% below its 52-week high of 86,159.02. The broader market has experienced a three-week consecutive decline, losing 4.08%, with mid-cap stocks leading gains today by 1.08%.
Universal Starch Chem Allied Ltd’s stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.
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Financial Performance and Fundamental Indicators
The company’s financial metrics continue to reflect subdued growth and operational pressures. Over the past five years, Universal Starch Chem Allied Ltd has recorded a compound annual growth rate (CAGR) of just 3.92% in operating profits, indicating limited expansion in core earnings.
Quarterly results for September 2025 revealed a decline in net sales to Rs.97.14 crores, down 18.9% compared to the previous four-quarter average. This contraction in sales volume has contributed to the stock’s underperformance relative to the benchmark indices.
Profitability ratios further highlight challenges in financial health. The company’s average EBIT to interest coverage ratio stands at a modest 1.67, signalling constrained ability to comfortably service debt obligations. Return on capital employed (ROCE) is recorded at 9.4%, which, while moderate, is accompanied by an enterprise value to capital employed ratio of 0.9, suggesting the stock is trading at a relatively attractive valuation compared to peers.
Despite the negative price trend, the company’s profits have risen by 351.8% over the past year, a notable increase that contrasts with the stock’s 29.24% decline in the same period. This divergence is reflected in a PEG ratio of zero, indicating that price movements have not aligned with earnings growth.
Long-Term Performance and Market Position
Universal Starch Chem Allied Ltd has consistently underperformed the BSE500 index over the last three years, with annual returns falling short of the benchmark in each period. The stock’s one-year return of -29.24% starkly contrasts with the Sensex’s positive 7.68% gain, underscoring the company’s relative weakness within the broader market.
The stock’s 52-week high was Rs.208, nearly double the current price, illustrating the extent of the decline over the past year. This sustained downtrend has contributed to the company’s Mojo Score of 26.0 and a Mojo Grade of Strong Sell, an upgrade from the previous Sell rating as of 13 Jan 2026, reflecting deteriorated market sentiment and fundamental concerns.
Promoters remain the majority shareholders, maintaining control over the company’s strategic direction.
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Valuation and Comparative Analysis
From a valuation standpoint, Universal Starch Chem Allied Ltd’s current metrics suggest the stock is trading at a discount relative to its historical averages and peer group valuations. The enterprise value to capital employed ratio of 0.9 is below typical sector averages, indicating potential value for investors seeking exposure within the Other Agricultural Products industry.
However, the company’s weak long-term fundamental strength and limited growth in operating profits have weighed on investor confidence, as reflected in the stock’s recent price action and rating adjustments.
Market participants have noted the stock’s consistent underperformance against the benchmark indices and sector peers, which has persisted over multiple years, contributing to its current standing as a Strong Sell in the Mojo grading system.
Summary of Key Metrics
To summarise, Universal Starch Chem Allied Ltd’s stock has reached a new 52-week low of Rs.109.6, down 10.46% on the day and 18.48% over the last five trading sessions. The company’s financial results show a decline in quarterly sales and modest profit growth, with limited capacity to service debt comfortably. The stock trades below all major moving averages and has underperformed the Sensex and sector indices over the past year and longer term.
While valuation ratios indicate the stock is trading at a discount, the overall market sentiment remains cautious, as reflected in the recent downgrade to a Strong Sell rating and a Mojo Score of 26.0.
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