Recent Price Movement and Market Context
On 21 November, Honeywell Automation India Ltd’s share price stood at ₹34,360.10, down ₹369.75 or 1.06% by 8:36 PM. This decline is part of a broader pattern, with the stock having fallen by 3.42% over the past week despite outperforming its sector by 0.94% on the day. Notably, the stock has been on a losing streak for five consecutive days, accumulating a 3.42% loss during this period. The price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum.
Investor Activity and Liquidity
Investor participation has shown signs of rising interest, with delivery volumes on 20 November increasing by 68.75% compared to the five-day average, reaching 3.41 thousand shares. Despite this uptick in trading activity, liquidity remains moderate, supporting trade sizes of approximately ₹0.26 crore based on 2% of the five-day average traded value. This suggests that while there is some renewed investor engagement, it has not yet translated into a reversal of the downward price trend.
Our latest monthly pick, this Small Cap from Oil Exploration/Refineries, is showing strong performance since announcement! See why our Investment Committee chose it after screening 50+ candidates.
- - Investment Committee approved
- - 50+ candidates screened
- - Strong post-announcement performance
Long-Term Performance and Benchmark Comparison
Honeywell Automation’s stock has consistently underperformed the broader market indices over multiple time horizons. Year-to-date, the stock has declined by 17.92%, in stark contrast to the Sensex’s 9.08% gain. Over the past year, the stock’s return was negative 16.72%, while the Sensex appreciated by 10.47%. This underperformance extends over three and five years, with the stock lagging the Sensex’s 39.39% and 94.23% gains respectively. Such persistent underperformance highlights challenges in the company’s growth trajectory and investor sentiment.
Financial Metrics and Valuation Concerns
Fundamental factors contribute significantly to the stock’s decline. The company’s operating profit has contracted at an annual rate of 0.84% over the last five years, indicating weak earnings growth. Additionally, the most recent quarterly results for September 2025 were flat, offering little optimism for near-term improvement. Despite a return on equity (ROE) of 12.3%, the stock commands a high valuation with a price-to-book ratio of 7.3, which is considered very expensive. Although it trades at a discount relative to its peers’ historical valuations, this premium valuation amid stagnant profit growth raises concerns among investors.
Sector Position and Shareholding
Honeywell Automation India Ltd holds a significant position in its sector, with a market capitalisation of ₹30,706 crore, making it the second largest company behind Kaynes Technology. It accounts for 23.09% of the sector’s market cap and generates annual sales of ₹4,537.80 crore, representing 18.70% of the industry. The company benefits from a low debt-to-equity ratio, averaging zero, and promoter majority shareholding, which typically provides stability. However, these positives have not been sufficient to offset the negative sentiment driven by poor financial performance and valuation concerns.
Why settle for Honeywell Auto? SwitchER evaluates this Industrial Manufacturing Midcap against peers, other sectors, and market caps to find you superior investment opportunities!
- - Comprehensive evaluation done
- - Superior opportunities identified
- - Smart switching enabled
Conclusion: Reasons Behind the Decline
The decline in Honeywell Automation India Ltd’s share price as of 21 November is primarily attributable to its sustained underperformance against benchmark indices and peers, weak long-term profit growth, and a high valuation that does not align with its earnings trajectory. Despite its strong sector presence and low leverage, the company’s flat recent results and negative operating profit growth over five years have weighed heavily on investor confidence. The stock’s consistent lag behind the Sensex and BSE500 indices over multiple years further underscores the challenges it faces in regaining momentum. While increased trading volumes suggest some investor interest, the prevailing market sentiment remains cautious, reflected in the stock’s trading below all major moving averages and its ongoing downward trend.
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 →
