Why is Indo Amines Ltd falling/rising?

Recent Price Movement and Market Performance

Indo Amines Ltd has experienced a notable decline in its share price over the past week and month, with losses of 1.72% and 5.52% respectively, significantly underperforming the Sensex benchmark which recorded declines of 0.75% and 1.98% over the same periods. Year-to-date, the stock has dropped 7.02%, compared to a more modest 2.32% fall in the Sensex. Over the last year, the stock has suffered a steep 22.65% decline, while the Sensex has gained 8.65%. Even over a three-year horizon, Indo Amines’ 12.27% return trails the Sensex’s 36.79% gain, highlighting persistent underperformance relative to the broader market.

On 19-Jan, the stock underperformed its sector by 2.16%, continuing a two-day losing streak that has resulted in a cumulative 4.8% drop. Intraday, the share price touched a low of ₹119.80, down 2.72%. Technical indicators also point to weakness, with the stock trading below all key moving averages including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling bearish momentum.

Investor participation appears to be waning, as delivery volumes on 16 Jan fell sharply by 44.36% compared to the five-day average, suggesting reduced buying interest. Despite this, liquidity remains adequate for trading sizes around ₹0.03 crore, indicating that the stock remains accessible to market participants.

Fundamental Strengths Amidst Price Weakness

Despite the recent price decline, Indo Amines Ltd exhibits strong fundamental attributes. The company has demonstrated healthy long-term growth, with operating profit expanding at an annualised rate of 31.25%. Its latest quarterly results, reported in September 2025, showed record operating profit to interest coverage at 5.28 times, quarterly PBDIT reaching ₹31.98 crore, and PBT excluding other income at ₹20.68 crore, all marking highs for the company.

Financial efficiency is reflected in a return on capital employed (ROCE) of 14.5%, which is considered very attractive. The stock trades at a discount with an enterprise value to capital employed ratio of 1.8, below the average historical valuations of its peers. Furthermore, the company’s profits have risen by 34.7% over the past year, even as the stock price declined by 22.65%, resulting in a low PEG ratio of 0.4, signalling potential undervaluation relative to earnings growth.

Reasons Behind the Stock’s Decline

Despite these positives, Indo Amines Ltd’s stock has struggled to gain investor confidence. One notable concern is the absence of domestic mutual fund holdings, which remain at zero percent. Given that mutual funds typically conduct thorough on-the-ground research, their lack of participation may indicate reservations about the company’s valuation or business prospects.

Moreover, the stock’s performance has been below par not only in the short term but also over longer periods. It has underperformed the BSE500 index over the last three years, one year, and three months, signalling persistent challenges in delivering market-beating returns. This sustained underperformance, combined with declining investor participation and technical weakness, has contributed to the recent price falls.

In summary, while Indo Amines Ltd boasts strong profit growth and attractive valuation metrics, its share price is currently weighed down by weak market sentiment, lack of institutional support, and underwhelming relative performance. Investors should weigh these factors carefully when considering exposure to the stock.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →