Recent Price Movement and Market Performance
Akums Drugs has been on a losing streak, with the stock falling for five consecutive days and registering a weekly decline of 5.91%, significantly underperforming the Sensex, which remained almost flat with a marginal 0.06% gain over the same period. The stock is trading perilously close to its 52-week low, just 1.67% above the ₹407.4 mark, underscoring the persistent bearish sentiment among investors. Intraday activity further highlighted weakness, with the share price touching a low of ₹411.1, down 2.5% during the session, and a weighted average price indicating that most volume was transacted near these lower levels.
Technically, the stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum. This technical weakness is compounded by a sharp decline in delivery volumes, which dropped by 65.3% compared to the five-day average as of 21 Nov, indicating falling investor participation and liquidity concerns despite the stock’s ability to handle moderate trade sizes.
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Fundamental Challenges Weighing on the Stock
Despite an attractive valuation indicated by a price-to-book ratio of 2.1 and a return on equity (ROE) of 9.7%, Akums Drugs’ fundamentals reveal significant weaknesses. Over the past year, the stock has delivered a negative return of 35.31%, starkly contrasting with the Sensex’s positive 7.31% gain. This underperformance is mirrored in the company’s long-term growth metrics, where net sales have grown at a modest annual rate of 6.10% and operating profit at 17.54% over the last five years, figures that fall short of robust growth expectations for the pharmaceutical sector.
More concerning are the recent quarterly results for September 2025, which showed a sharp deterioration in profitability. The company’s interest expenses surged by 380.25% to ₹46.44 crores over the latest six months, while the quarterly profit after tax (PAT) plunged by 50.1% compared to the average of the previous four quarters, settling at ₹40.78 crores. The operating profit to interest coverage ratio also hit a low of 4.05 times, signalling increased financial strain and reduced capacity to service debt comfortably.
Investor Sentiment and Institutional Participation
Investor confidence appears to be waning, as evidenced by a 1.54% reduction in institutional holdings over the previous quarter, with these investors now collectively owning just 11.55% of the company. Institutional investors typically possess superior analytical resources and tend to adjust their positions based on fundamental assessments, suggesting a cautious or negative outlook on Akums Drugs’ prospects. This decline in institutional participation further exacerbates the stock’s downward pressure, as retail investors may lack the conviction or information to counterbalance the selling.
In addition to the weak fundamentals and investor sentiment, the stock’s performance relative to broader market indices and sector benchmarks has been disappointing. It has underperformed the BSE500 index over the last three years, one year, and three months, reinforcing the narrative of sustained underperformance and limited appeal to investors seeking growth or stability.
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Conclusion: Why Akums Drugs Shares Are Falling
The decline in Akums Drugs & Pharmaceuticals Ltd’s share price on 24-Nov and over recent weeks is primarily driven by a combination of weak financial results, deteriorating profitability, and declining investor interest. Despite some positive aspects such as rising profits over the past year, the company’s poor long-term growth rates, elevated interest costs, and falling PAT have overshadowed these gains. The stock’s technical weakness, proximity to 52-week lows, and reduced institutional participation further compound the negative sentiment. Consequently, the stock continues to underperform both its sector and broader market indices, reflecting a cautious outlook from investors and analysts alike.
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