Recent Price Movement and Market Performance
Eveready Industries has experienced a sustained fall over the past week, with the stock losing 8.72% compared to a marginal 0.06% decline in the Sensex. Over the last month, the stock’s depreciation has deepened to 15.62%, while the Sensex has gained 0.82%. Year-to-date figures reveal a stark contrast, with Eveready down 19.07% against the Sensex’s 8.65% rise. This trend extends over longer periods as well, with the stock underperforming the benchmark indices consistently over one, three, and five years.
On the day of 24-Nov, the stock underperformed its sector by 1.82%, hitting an intraday low of ₹316, down 4.2%. The weighted average price indicates that a larger volume of shares traded closer to this low, signalling selling pressure. Furthermore, Eveready is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—highlighting a bearish technical outlook. Despite this, investor participation has risen, with delivery volumes on 21 Nov surging by 143.08% compared to the five-day average, suggesting increased activity amid the decline.
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Financial Strength and Valuation Metrics
On the positive side, Eveready Industries demonstrates strong management efficiency, reflected in a return on capital employed (ROCE) of 16.73%. The company’s valuation appears attractive with an enterprise value to capital employed ratio of 3.2, indicating it is trading at a discount relative to its peers’ historical averages. Profit growth over the past year has been encouraging, rising by 18.6%, even as the stock price declined by 14.78%. The price-to-earnings-to-growth (PEG) ratio stands at 1.4, suggesting moderate valuation relative to earnings growth.
However, these positives are overshadowed by significant concerns regarding the company’s debt profile and long-term growth. The debt to EBITDA ratio is elevated at 2.51 times, signalling a low ability to service debt efficiently. The debt-equity ratio at the half-year mark is notably high at 3.92 times, which raises questions about financial leverage and risk. Additionally, the debtors turnover ratio is low at 1.06 times, indicating potential inefficiencies in receivables management.
Operational Challenges and Growth Prospects
Eveready’s operating profit has contracted at an annualised rate of 3.5% over the last five years, pointing to poor long-term growth momentum. The company reported flat results in the September 2025 quarter, with earnings per share (EPS) at a negative ₹1.09, reflecting operational challenges. This stagnation in profitability, combined with high leverage, has likely contributed to investor caution and the stock’s persistent underperformance.
The stock’s consistent underperformance against the benchmark indices over the past three years further compounds concerns. Despite the broader market and BSE500 index delivering positive returns, Eveready has lagged behind, generating negative returns in each of the last three annual periods. This trend underscores the company’s struggle to keep pace with market growth and investor expectations.
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Investor Sentiment and Outlook
The recent five-day consecutive decline and the stock trading below all major moving averages reflect a bearish sentiment among investors. While rising delivery volumes indicate heightened trading activity, the prevailing concerns about debt servicing capacity and lacklustre profit growth weigh heavily on the stock’s appeal. The majority shareholding by non-institutional investors may also limit the influence of large institutional buying that could stabilise the price.
In summary, Eveready Industries India Ltd’s share price decline on 24-Nov is primarily driven by its weak debt servicing ability, poor long-term operating profit growth, and consistent underperformance relative to market benchmarks. Despite some attractive valuation metrics and profit growth in the recent year, these positives have not been sufficient to offset the negative sentiment stemming from financial leverage and operational challenges.
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