Why is Andrew Yule & Co falling/rising?

Recent Price Movement and Market Context

Andrew Yule & Co has experienced a notable decline in its share price over recent periods. In the past week, the stock has dropped by 5.98%, significantly underperforming the Sensex, which remained almost flat with a marginal 0.06% gain. Over the last month, the stock fell by 6.93%, while the benchmark index advanced by 0.82%. Year-to-date, the stock has plummeted by 38.73%, contrasting sharply with the Sensex’s 8.65% rise. This downward trajectory extends over the last year as well, with the stock losing 38.27% compared to the Sensex’s 7.31% gain.

On the day in question, the stock underperformed its sector by 2.74%, continuing a two-day losing streak that has resulted in a cumulative decline of 3.61%. The share price 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.

Fundamental Weaknesses Driving the Decline

The primary reasons behind Andrew Yule & Co’s falling stock price stem from its weak long-term fundamentals and disappointing recent financial results. The company has been grappling with operating losses, with operating profit shrinking at an alarming annual rate of -240.14% over the past five years. This negative growth trajectory highlights the company’s inability to generate consistent earnings from its core operations.

Moreover, the company’s capacity to service its debt is precarious, as evidenced by a poor average EBIT to interest ratio of -6.46. This indicates that earnings before interest and taxes are insufficient to cover interest expenses, raising concerns about financial stability and credit risk.

Recent quarterly results further underscore the challenges. For the quarter ending September 2025, net sales declined by 20.02% to ₹71.52 crores. Profit before tax, excluding other income, plunged by 398.31% to a loss of ₹10.62 crores, while the net profit after tax turned negative at ₹-0.02 crores, a 100.1% fall. These figures reflect a deteriorating operational environment and weak profitability.

Investor Sentiment and Market Perception

Investor participation has shown some increase, with delivery volumes rising sharply by over 627% compared to the five-day average as of 25 October. However, this heightened activity has not translated into price support, as the stock continues to trade at depressed levels. Liquidity remains adequate for trading, but the persistent downtrend suggests a lack of confidence among market participants.

Adding to the negative sentiment is the absence of domestic mutual fund holdings in Andrew Yule & Co. Despite the company’s size, mutual funds hold no stake, which may indicate their reluctance to invest due to concerns over valuation or business prospects. This lack of institutional backing often weighs heavily on a stock’s performance.

From a valuation perspective, the stock is considered risky, trading below its historical averages. While profits have reportedly risen by 122.3% over the past year, the stock’s return has been negative at -38.27%, resulting in a PEG ratio of 2. This disparity suggests that the market is cautious about the sustainability of earnings growth.

Long-Term Performance and Outlook

Over the longer term, Andrew Yule & Co has underperformed key market indices. While the stock has managed a modest 1.48% gain over three years, this pales in comparison to the Sensex’s 36.34% rise during the same period. Over five years, the stock’s 71.54% gain still lags behind the Sensex’s 90.69% appreciation. This underperformance, coupled with recent financial setbacks, paints a challenging picture for investors seeking growth or stability.

In summary, the decline in Andrew Yule & Co’s share price as of 24 November is primarily driven by weak operational results, poor profitability metrics, and a lack of institutional investor confidence. The stock’s sustained underperformance relative to benchmarks and its trading below all major moving averages further reinforce the bearish outlook. Investors should carefully weigh these factors before considering exposure to this stock.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →