Why is Galaxy Surfact. falling/rising?

Recent Price Movement and Market Comparison

Galaxy Surfactants’ stock has been under pressure over multiple time frames. Over the past week, the share price fell by 3.18%, contrasting with the Sensex’s modest gain of 0.79%. The one-month decline of 7.24% further emphasises the stock’s weakness, especially when compared to the Sensex’s 0.95% rise. Year-to-date, the stock has lost 17.89%, while the benchmark index has gained 9.08%. Over the last year, the stock’s performance has been particularly poor, with a 22.67% decline against the Sensex’s 10.47% increase. This trend extends over three and five years, where Galaxy Surfactants has lagged significantly behind the benchmark, highlighting persistent challenges in delivering shareholder value.

On the day in question, the stock traded close to its 52-week low, just 2.44% above the lowest price of ₹2,025. The intraday low touched ₹2,057, representing a 2.46% drop from the previous close. Additionally, the stock underperformed its sector by 0.64%, signalling relative weakness within its industry peers. Technical indicators also point to bearish momentum, with the share price trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages.

Investor participation appears to be waning, as evidenced by a sharp 72.65% decline in delivery volume on 20 Nov compared to the five-day average. This reduced trading activity suggests diminished enthusiasm among shareholders and traders, which can exacerbate downward price pressure despite the stock’s adequate liquidity for modest trade sizes.

Fundamental Challenges Weighing on the Stock

Despite some positive attributes such as a high return on equity (ROE) of 16.22% and a low average debt-to-equity ratio of 0.09 times, Galaxy Surfactants faces significant headwinds. The company’s long-term growth has been lacklustre, with net sales increasing at an annual rate of just 12.93% and operating profit growing by a mere 1.18% over the past five years. This sluggish expansion contrasts sharply with the expectations of investors seeking robust earnings momentum.

The company’s recent quarterly results for September 2025 further underscore these concerns. Operating cash flow for the year was reported at ₹420.51 crore, marking the lowest level in recent periods. Profit before tax excluding other income declined by 23.37% to ₹73.41 crore, while net profit after tax fell by 21.5% to ₹66.49 crore. These declines in profitability have contributed to investor scepticism and selling pressure.

Valuation metrics also raise caution. With a price-to-book value ratio of 2.9, Galaxy Surfactants is trading at a premium relative to its peers’ historical averages. This expensive valuation is difficult to justify given the company’s deteriorating profit trends and underwhelming returns. The stock’s ROE of 11.3% in the recent period, combined with falling profits and negative returns, suggests that the market is reassessing the company’s growth prospects and risk profile.

Consistent underperformance against the benchmark indices over the last three years has further eroded investor confidence. The stock has not only generated negative returns but has also lagged behind the BSE500 index in each of the past three annual periods, signalling structural challenges in maintaining competitive performance.

Conclusion: Why the Stock is Falling

The decline in Galaxy Surfactants’ share price on 21-Nov is a reflection of multiple adverse factors. The company’s weak financial performance, highlighted by falling profits and operating cash flows, has undermined investor confidence. Its inability to keep pace with benchmark indices and peers over extended periods has further contributed to negative sentiment. The stock’s premium valuation despite deteriorating fundamentals has likely deterred buyers, while reduced investor participation has amplified selling pressure.

In summary, Galaxy Surfactants is grappling with a challenging growth environment and disappointing earnings results, which have combined to weigh heavily on its share price. Investors appear cautious, favouring stocks with stronger growth trajectories and more attractive valuations in the current market landscape.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →