Why is Alkyl Amines falling/rising?

Recent Price Movement and Market Context

On 21-Nov, the stock reversed its short-term upward trend after two consecutive days of gains, touching an intraday low of ₹1,736.10, representing a 2.01% decline from previous levels. This downward movement was accompanied by a notable reduction in investor participation, with delivery volumes on 20 Nov falling by 31.67% compared to the five-day average. Furthermore, Alkyl Amines is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day marks, signalling a bearish technical outlook.

Underperformance Against Benchmarks

Over the past week, the stock has declined by 1.49%, contrasting with the Sensex’s gain of 0.79%. This trend extends over longer periods, with the stock falling 8.46% in the last month while the Sensex rose by 0.95%. Year-to-date, Alkyl Amines has marginally declined by 1.01%, whereas the Sensex has advanced by 9.08%. The disparity is even more pronounced over one, three, and five-year horizons, where the stock has underperformed the benchmark indices significantly. For instance, over three years, the stock has lost 37.22%, while the Sensex has gained 39.39%, highlighting persistent challenges in the company’s growth trajectory and market sentiment.

Financial Performance and Valuation Concerns

Despite demonstrating high management efficiency with a return on equity (ROE) of 19.46% and maintaining a very low average debt-to-equity ratio of 0.01, Alkyl Amines faces significant headwinds in its financial performance. The company’s operating profit has contracted at an annualised rate of 5.57% over the past five years, signalling weak long-term growth. The most recent quarterly results for September 2025 were largely flat, with the company reporting a decline in key profitability metrics. The quarterly profit after tax (PAT) stood at ₹42.94 crores, down 8.0% compared to the average of the previous four quarters, while earnings per share (EPS) dropped to a low of ₹8.39. Additionally, the debtors turnover ratio for the half-year period was notably low at 0.66 times, indicating potential inefficiencies in receivables management.

Valuation Premium and Market Expectations

Alkyl Amines is currently trading at a premium valuation, with a price-to-book value ratio of 6.2, which is considered expensive relative to its peers. This elevated valuation is not fully supported by the company’s financial performance, as reflected in a relatively modest ROE of 12.6 in recent periods. The stock’s price-earnings-to-growth (PEG) ratio stands at 5.9, suggesting that investors are paying a high price for expected growth that has yet to materialise. Over the past year, while the stock has generated a negative return of 8.98%, the company’s profits have increased by only 8.3%, underscoring a disconnect between market pricing and fundamental earnings growth.

Consistent Underperformance and Investor Sentiment

The stock’s persistent underperformance against the benchmark indices over the last three years has likely contributed to waning investor confidence. Alongside generating negative returns, Alkyl Amines has consistently lagged behind the BSE500 index in each of the last three annual periods. This trend, combined with the company’s flat recent results and expensive valuation, has weighed on the stock’s appeal, leading to reduced investor participation and selling pressure.

Conclusion: Why Alkyl Amines Is Falling

In summary, the decline in Alkyl Amines Chemicals Ltd’s share price as of 21-Nov is attributable to a combination of weak financial results, poor long-term growth prospects, and an expensive valuation that is not justified by earnings performance. The stock’s consistent underperformance relative to benchmark indices and sector peers has further dampened investor enthusiasm. Technical indicators, including trading below all major moving averages and falling delivery volumes, reinforce the bearish sentiment. While the company benefits from strong management efficiency and low leverage, these positives have not been sufficient to offset concerns over profitability and valuation, leading to the recent price decline.

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