Recent Price Movements and Volatility
The stock hit a new 52-week low of ₹716 on the day, underscoring the bearish sentiment among investors. Despite an intraday high of ₹799, the share price ultimately succumbed to selling pressure, closing near its lows. The stock has experienced high volatility, with an intraday range of ₹83 and a volatility measure of 5.48%, indicating significant price swings within the trading session. Notably, the weighted average price suggests that a larger volume of shares traded closer to the lower end of the day’s range, signalling stronger selling interest.
Brady & Morris has now declined for two consecutive days, losing 6.37% over this short period. It has also underperformed its sector by 2.69% on the day, reflecting broader challenges within its industry segment. The stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, which typically signals a bearish technical outlook.
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Financial Performance and Profitability Concerns
Underlying the share price weakness are troubling financial results. Over the past year, Brady & Morris has generated a negative return of 38.56%, starkly contrasting with the Sensex’s positive 8.61% gain. The company’s profits have declined sharply by 49.7% during the same period, signalling deteriorating operational performance. The latest quarterly results, declared in September 2025, were particularly disappointing. Net sales fell by 34.53%, with quarterly net sales at ₹12.99 crore representing a 42.0% drop compared to the previous four-quarter average.
Profit before tax excluding other income plummeted by 99.5% to a mere ₹0.01 crore, while net profit after tax declined by 71.6% to ₹0.48 crore. These figures highlight a severe contraction in earnings and raise concerns about the company’s ability to sustain profitability in the near term. The firm has reported negative results for three consecutive quarters, which has eroded investor confidence and contributed to the stock’s downward trajectory.
Long-Term Growth and Valuation Metrics
Despite the recent setbacks, Brady & Morris has demonstrated strong long-term growth, with a five-year return of 735.08%, significantly outperforming the Sensex’s 72.66% over the same period. The company’s operating profit has grown at an annual rate of 18.11% over five years, indicating a solid historical growth trend. Additionally, management efficiency remains high, with a return on equity (ROE) of 32.29%, and the company maintains a healthy debt servicing capacity, reflected in a low Debt to EBITDA ratio of 1.11 times.
From a valuation standpoint, the stock trades at a price-to-book value of 3.3, which is attractive relative to its peers’ historical averages. This discount suggests that the market may be pricing in the recent earnings weakness and uncertain outlook. However, the stock’s poor recent sales and profit performance have overshadowed these positives, leading to sustained selling pressure.
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Market Underperformance and Investor Sentiment
Brady & Morris has significantly underperformed the broader market and its benchmark indices over the past year. While the BSE500 index has delivered returns of 8.76%, the stock has declined by 38.56%, reflecting weak investor sentiment and concerns about the company’s near-term prospects. The recent increase in delivery volume by 20.96% compared to the five-day average suggests rising investor participation, but this has coincided with falling prices, indicating that selling pressure is dominating.
In summary, the decline in Brady & Morris Engineering Company Ltd’s share price on 27-Jan is primarily driven by disappointing quarterly results marked by steep declines in sales and profits, persistent negative earnings over multiple quarters, and a broader trend of underperformance relative to market benchmarks. Despite strong long-term growth and solid management efficiency, the immediate financial challenges and bearish technical signals have weighed heavily on the stock, leading to its recent fall.
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