Why is APM Industries Ltd falling/rising?

Recent Price Movement and Market Comparison

APM Industries has experienced a notable decline over the past week, with its stock price falling by 6.60%, significantly underperforming the Sensex, which declined by only 0.30% during the same period. Year-to-date, the stock mirrors this trend with a 6.60% drop compared to the Sensex’s marginal 0.30% decrease. Over the last year, the stock has suffered a steep 21.55% loss, contrasting sharply with the Sensex’s robust 8.65% gain. This persistent underperformance extends over a three-year horizon, where APM Industries has declined by 30.28%, while the Sensex surged by 41.84%.

Despite the stock trading above its 100-day and 200-day moving averages, it remains below its shorter-term averages of 5-day, 20-day, and 50-day, indicating recent selling pressure. Investor participation has also waned, with delivery volumes on 06 Jan falling by nearly 38% compared to the five-day average, signalling reduced buying interest. Liquidity remains adequate for trading, but the declining volumes suggest caution among market participants.

Fundamental Performance and Profitability Concerns

While APM Industries reported some positive quarterly results in September 2025, including its highest-ever cash and cash equivalents of ₹181.50 crores and a quarterly PBDIT of ₹2.88 crores, these gains have not translated into sustained profitability. The operating profit to net sales ratio reached a peak of 4.26% in the same quarter, yet the company’s long-term fundamentals remain weak.

The firm has experienced a drastic negative compound annual growth rate (CAGR) of -182.69% in operating profits over the past five years, signalling deteriorating operational efficiency. Additionally, the average return on equity stands at a modest 5.81%, reflecting limited profitability relative to shareholders’ funds. This low return metric suggests that the company is not generating sufficient earnings to justify its equity base, which is a critical concern for investors seeking value creation.

Risk Factors and Valuation Challenges

APM Industries is currently trading at valuations that appear risky when compared to its historical averages. The stock’s negative operating profits and declining returns have heightened concerns about its financial health. Over the last year, the company’s profits have fallen by 21%, aligning with the stock’s 21.55% price decline, indicating that earnings deterioration is a key driver behind the share price weakness.

Moreover, the stock has consistently underperformed the broader market and its sector peers, including the BSE500 index, over the past three years. This persistent underperformance has likely eroded investor confidence, contributing to the recent price declines and subdued trading volumes.

Shareholding and Investor Sentiment

The majority of APM Industries’ shares are held by promoters, which can sometimes provide stability but may also limit liquidity and broader market participation. The recent decline in delivery volumes suggests that retail and institutional investors are stepping back, possibly due to concerns over the company’s weak earnings trajectory and lacklustre returns.

In summary, the decline in APM Industries Ltd’s share price on 07-Jan is primarily attributable to its weak long-term fundamental strength, negative operating profit trends, and consistent underperformance relative to market benchmarks. Despite some positive quarterly cash and profit metrics, these have not been sufficient to offset broader concerns about profitability and growth. Investors appear cautious, reflected in falling volumes and subdued price action, as the stock continues to lag behind its sector and the broader market.

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 →