Why is Anjani Foods falling/rising?

Short-Term Price Movement and Trading Activity

On the day in question, Anjani Foods outperformed its sector by 4.67%, signalling a stronger relative performance within its industry group. The stock demonstrated significant volatility, with an intraday price range spanning from a low of ₹21.12 to a high of ₹26.00, representing a wide 13.59% surge at peak levels. Despite this volatility, the weighted average price indicated that a larger volume of shares traded closer to the lower end of the day’s range, suggesting some profit-taking or cautious buying at elevated prices.

Investor participation has also increased, with delivery volumes on 08 Dec rising by 39% compared to the five-day average, indicating heightened interest and possibly renewed confidence among shareholders. The stock’s price currently sits above its five-day moving average but remains below longer-term averages such as the 20-day, 50-day, 100-day, and 200-day moving averages, highlighting that while short-term momentum is positive, the broader trend remains subdued.

Long-Term Performance and Valuation Context

Despite the recent price rise, Anjani Foods has struggled over the longer term. The stock has delivered a negative return of 32.11% over the past year and a 27.60% decline over three years, significantly underperforming the Sensex, which has gained 3.87% and 36.16% respectively over the same periods. Year-to-date, the stock is down 34.78%, while the benchmark index has risen by 8.35%. This persistent underperformance reflects underlying operational and financial challenges.

Fundamentally, the company’s return on capital employed (ROCE) stands at a modest 8.5%, with an average of 5.99% over the longer term, indicating limited efficiency in generating profits from its capital base. The enterprise value to capital employed ratio of 2.9 suggests the stock is trading at a discount relative to its peers’ historical valuations, which may partly explain the recent buying interest as investors seek value opportunities.

However, profitability has been under pressure, with profits declining by 29.2% over the past year. The company’s net sales and operating profit have grown at annual rates of 10.86% and 6.15% respectively over the last five years, which is relatively weak growth for the sector. Additionally, the company’s ability to service debt is constrained, with an average EBIT to interest coverage ratio of just 1.36, signalling financial vulnerability.

Recent Financial Results and Market Sentiment

Recent quarterly results have been lacklustre, with the earnings per share (EPS) for the quarter ending September 2025 reported at a low ₹0.01, reflecting flat performance. This has contributed to the stock’s consistent underperformance against the BSE500 index over the last three annual periods. Despite these challenges, the stock’s recent gains suggest some short-term optimism, possibly driven by bargain hunting or speculative trading amid its attractive valuation metrics.

Conclusion: Why the Stock is Rising Despite Weak Fundamentals

The rise in Anjani Foods’ share price on 09-Dec can be attributed primarily to short-term trading dynamics rather than a fundamental turnaround. The stock’s recent two-day gain of over 5% and outperformance relative to its sector suggest renewed investor interest, possibly driven by its attractive valuation and discount to peers. Increased delivery volumes and the stock trading above its short-term moving average further support this view.

Nevertheless, the company’s weak long-term financial performance, flat recent earnings, and poor debt servicing capacity continue to weigh on investor confidence. The stock’s volatility and wide intraday price swings indicate that market participants remain cautious, balancing speculative buying against underlying risks. Investors should therefore approach the recent price rise with prudence, recognising that the stock’s longer-term challenges remain unresolved.

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 →