Recent Price Movement and Market Context
On the day the stock touched its new low, it recorded an intraday decline of 4.46%, closing with a day change of -3.42%. This underperformance extended to the sector level, with Websol Energy lagging the Other Electrical Equipment sector by 1.93%. The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
Meanwhile, the broader market, represented by the Sensex, opened flat but moved into negative territory, trading at 83,173.27 points, down 0.17% or 64.61 points. The Sensex remains 3.59% below its 52-week high of 86,159.02 and is positioned below its 50-day moving average, although the 50DMA itself is above the 200DMA, indicating mixed medium-term market signals.
Performance Over the Past Year
Websol Energy System Ltd’s one-year performance has been notably weak, with the stock declining by 58.62%. This contrasts sharply with the Sensex’s positive return of 6.59% and the BSE500’s 7.09% gain over the same period. The stock’s 52-week high was Rs.159.90, highlighting the extent of the recent correction.
The stock’s Mojo Score currently stands at 43.0, with a Mojo Grade of Sell, downgraded from Hold on 3 Nov 2025. The Market Cap Grade is rated 3, reflecting moderate market capitalisation metrics relative to peers.
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Valuation and Financial Metrics
Despite the recent price decline, Websol Energy System Ltd’s valuation metrics remain elevated. The company reports a Return on Capital Employed (ROCE) of 55.5%, which is robust but accompanied by an enterprise value to capital employed ratio of 6, indicating a relatively expensive valuation compared to historical averages. However, the stock is currently trading at a discount relative to its peers’ average historical valuations.
Interestingly, the company’s profits have surged by 336.7% over the past year, even as the stock price has declined sharply. The Price/Earnings to Growth (PEG) ratio stands at 0, reflecting the rapid profit growth relative to price movements.
Shareholding and Market Pressure
A notable factor contributing to the stock’s downward pressure is the high level of promoter share pledging, with 88.12% of promoter shares pledged. In declining markets, such a high pledge percentage can exacerbate selling pressure, as pledged shares may be liquidated to meet margin calls or debt obligations, adding to the stock’s volatility.
Operational and Sales Performance
On the operational front, Websol Energy System Ltd has demonstrated healthy long-term growth. Net sales have increased at an annual rate of 45.26%, while operating profit has expanded by 141.82%. The company reported very positive quarterly results in December 2025, with net sales rising by 55.17% to Rs.261.02 crores, the highest quarterly figure recorded.
Operating profit before depreciation, interest, and taxes (PBDIT) also reached a peak of Rs.106.45 crores in the same quarter. The operating profit to interest ratio stands at a strong 29.01 times, indicating comfortable coverage of interest expenses by operating earnings.
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Summary of Key Concerns and Market Position
While Websol Energy System Ltd has delivered strong profit growth and sales expansion, the stock’s performance has been weighed down by valuation concerns and the high proportion of pledged promoter shares. The stock’s consistent underperformance relative to the broader market and sector indices over the past year highlights the challenges it faces in regaining investor confidence.
The current trading levels, below all major moving averages, reflect a cautious market stance. The downgrade in Mojo Grade from Hold to Sell on 3 Nov 2025 further underscores the tempered outlook based on the company’s recent price action and valuation metrics.
Despite the positive quarterly results and operational metrics, the stock’s trajectory remains subdued, with the 52-week low of Rs.64.74 marking a significant technical milestone in its recent price history.
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