Weizmann Ltd Valuation Shifts Signal Growing Price Pressure Amid Sector Volatility

Valuation Dynamics and Market Context

As of 1 Feb 2026, Weizmann Ltd trades at ₹83.42, up 4.54% on the day from a previous close of ₹79.80. The stock’s 52-week range spans ₹79.12 to ₹141.80, indicating significant volatility over the past year. Despite this, the company’s valuation metrics have deteriorated notably, with the Price to Earnings (P/E) ratio plunging to a negative -36.93, signalling losses or accounting anomalies impacting earnings. Meanwhile, the Price to Book Value (P/BV) stands at 2.04, reflecting a premium over its net asset value.

These valuation shifts have prompted MarketsMOJO to downgrade Weizmann’s Mojo Grade from Hold to Sell as of 29 Jul 2025, with a current Mojo Score of 37.0. The Market Cap Grade remains low at 4, underscoring concerns about the company’s market capitalisation relative to its fundamentals.

Comparative Valuation: Peers and Sector Benchmarks

When benchmarked against peers in the Garments & Apparels industry, Weizmann’s valuation appears expensive but not the most stretched. For instance, R&B Denims trades at a P/E of 42.61 and an EV/EBITDA of 31.73, categorised as Very Expensive. SBC Exports and Sumeet Industries exhibit even higher multiples, with P/E ratios of 60.86 and 74.81 respectively, and EV/EBITDA multiples exceeding 35. In contrast, Weizmann’s EV/EBITDA ratio of 8.02 is comparatively moderate, suggesting some operational efficiency or lower leverage relative to these peers.

On the other end of the spectrum, companies like Indo Rama Synthetic and Mafatlal Industries are rated Very Attractive with P/E ratios below 10 and EV/EBITDA multiples under 9, highlighting a valuation gap that investors might consider when reallocating capital within the sector.

Financial Performance and Return Analysis

Weizmann’s return profile over various time horizons reveals a mixed picture. The stock has outperformed the Sensex over the last five and ten years, delivering cumulative returns of 103.46% and 337.90% respectively, compared to the Sensex’s 77.74% and 230.79%. However, recent performance has been disappointing, with a 1-year return of -33.74% versus the Sensex’s positive 7.18%, and a year-to-date decline of -13.10% against the benchmark’s -3.46%.

This recent underperformance aligns with the valuation deterioration and the downgrade in investor sentiment. The company’s operational returns also present a nuanced view: a robust Return on Capital Employed (ROCE) of 18.32% contrasts sharply with a negative Return on Equity (ROE) of -5.53%, suggesting challenges in generating shareholder value despite efficient capital utilisation.

Enterprise Value and Profitability Metrics

Examining enterprise value multiples, Weizmann’s EV/EBIT ratio stands at 10.78, and EV/Capital Employed at 1.98, indicating moderate valuation relative to earnings before interest and tax and capital base. The EV/Sales ratio of 1.02 further suggests the market is pricing the company at just over one times its annual sales, a figure that is neither particularly cheap nor expensive within the sector context.

Dividend yield remains modest at 0.67%, reflecting limited cash returns to shareholders amid ongoing operational pressures. The PEG ratio is reported at zero, likely due to negative or negligible earnings growth expectations, which further dampens the stock’s attractiveness from a growth valuation perspective.

Price Movement and Trading Range

On the trading front, Weizmann’s stock has shown intraday volatility, with a high of ₹88.03 and a low of ₹80.22 on the latest session. The current price of ₹83.42 remains closer to the 52-week low of ₹79.12 than the high of ₹141.80, signalling a significant retracement from peak levels. This price action reflects investor caution amid valuation concerns and sector headwinds.

Implications for Investors and Outlook

The shift in Weizmann Ltd’s valuation from fair to expensive, combined with a negative P/E ratio and deteriorating returns on equity, signals caution for investors. While the company maintains operational efficiency as reflected in its ROCE, the negative ROE and poor recent price performance suggest challenges in translating capital into shareholder wealth.

Compared to its peers, Weizmann’s valuation is less stretched on some multiples but remains unattractive given the negative earnings outlook and sector volatility. Investors may find more compelling opportunities in companies with lower P/E and EV/EBITDA multiples, stronger growth prospects, and healthier dividend yields within the Garments & Apparels space.

Market participants should closely monitor upcoming quarterly results and sector developments, as any improvement in earnings or operational metrics could help re-rate the stock. However, until such signals emerge, the current valuation profile and downgrade to a Sell rating suggest limited upside and elevated risk.

Historical Perspective and Sector Trends

Over the longer term, Weizmann has delivered strong absolute returns, outperforming the Sensex over five and ten years. This track record underscores the company’s ability to generate value in favourable market conditions. Yet, the recent underperformance and valuation pressures reflect broader challenges in the Garments & Apparels sector, including raw material cost inflation, competitive pressures, and shifting consumer demand patterns.

Sector peers with very attractive valuations, such as Indo Rama Synthetic and Mafatlal Industries, may benefit from these headwinds more effectively, offering investors alternative avenues for exposure to the garment industry with potentially lower risk profiles.

Conclusion

In summary, Weizmann Ltd’s valuation parameters have shifted significantly, with a negative P/E ratio and elevated P/BV signalling expensive pricing relative to fundamentals. The downgrade to a Sell rating by MarketsMOJO reflects these concerns amid a challenging sector environment. While the company’s operational metrics show some strengths, the overall risk-reward profile appears unfavourable at current levels. Investors should weigh these factors carefully and consider peer comparisons before committing capital.

Unlock special upgrade rates for a limited period. Start Saving Now →