Why is Gillette India falling/rising?

Recent Price Movement and Market Comparison

Gillette India’s stock has been on a steady decline, falling 3.19% over the past week and 5.43% in the last month, while the broader Sensex index has marginally gained 0.02% and 0.14% respectively during these periods. Year-to-date, the stock has dropped 14.61%, contrasting sharply with the Sensex’s 8.37% gain. Over the last twelve months, the stock’s performance has been particularly disappointing, with a 16.98% loss compared to the Sensex’s 3.59% rise. This underperformance is further highlighted by the stock’s negative returns of 2.43% over the last three consecutive trading days.

Adding to the bearish sentiment, Gillette India is trading below all key moving averages — the 5-day, 20-day, 50-day, 100-day, and 200-day averages — signalling sustained downward momentum. Investor participation has also waned, with delivery volumes on 15 Dec falling by 36.65% compared to the five-day average, indicating reduced buying interest amid the decline.

Fundamental Strengths and Valuation Challenges

Despite the recent price weakness, Gillette India maintains strong management efficiency, reflected in a high return on equity (ROE) of 40.86%. The company’s balance sheet is robust, with an average debt-to-equity ratio of zero, indicating a debt-free position that reduces financial risk. Promoters hold the majority stake, which often suggests stable ownership and strategic continuity.

However, the company’s long-term growth trajectory appears modest. Over the past five years, net sales have grown at an annual rate of 11.38%, while operating profit has increased by 16.78%. These growth rates, while positive, may not be sufficient to justify the current valuation levels in the eyes of investors.

Gillette India’s valuation metrics highlight this tension. The stock trades at a price-to-book value of 22.6, which is considered very expensive, especially when juxtaposed with its flat financial results reported in September 2025. Although the company’s profits have risen by 27% over the past year, the stock’s price has declined by nearly 17%, resulting in a price-to-earnings-to-growth (PEG) ratio of 1.7. This elevated PEG ratio suggests that the market may be pricing in expectations that are difficult to meet, contributing to investor caution.

Market Underperformance and Investor Sentiment

Gillette India’s underperformance relative to the broader market is stark. While the BSE500 index has generated a modest 0.72% return over the last year, Gillette India has delivered negative returns of 16.98%. This divergence underscores investor concerns about the company’s growth prospects and valuation premium. The stock’s liquidity remains adequate, with a trade size capacity of approximately ₹0.46 crore based on recent volumes, but the declining delivery volumes indicate waning investor enthusiasm.

In summary, Gillette India’s recent share price decline is driven by a combination of factors: persistent underperformance against key market indices, expensive valuation metrics that challenge growth expectations, and subdued investor participation. While the company’s strong management efficiency and debt-free status provide some reassurance, the flat recent results and modest long-term growth rates have weighed heavily on sentiment. Investors appear cautious, reflecting concerns that the stock’s premium valuation may not be justified by its current financial trajectory.

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 →