Why is Jet Freight Logistics Ltd falling/rising?

Recent Price Movement and Market Comparison

The stock has been on a decline for the past two days, losing 7.72% over this short period. This recent weakness is part of a broader trend, with the share price falling 8.48% over the last week and 9.83% in the past month. These declines starkly contrast with the Sensex, which has only dipped marginally by 0.99% and 1.20% respectively over the same periods. Year-to-date, Jet Freight Logistics has underperformed significantly, registering a negative return of 10.17%, while the Sensex has gained 8.36%. Over the last one and three years, the stock has continued to lag, posting negative returns of 8.94% and 6.62%, respectively, compared to the Sensex’s robust gains of 8.21% and 39.17%.

Trading Activity and Technical Indicators

Despite the recent price falls, the stock remains above its 50-day, 100-day, and 200-day moving averages, suggesting some underlying support at longer-term levels. However, it is trading below its 5-day and 20-day moving averages, indicating short-term weakness. Notably, investor participation has increased sharply, with delivery volumes on 29 Dec rising by over 320% compared to the five-day average, signalling heightened trading interest amid the price decline. Liquidity remains adequate, allowing for reasonable trade sizes without significant market impact.

Fundamental Challenges Weighing on the Stock

Jet Freight Logistics faces several fundamental headwinds that explain its share price weakness. The company’s long-term sales growth has been negative, with a compound annual growth rate of -0.42% over the past five years, indicating stagnation or contraction in its core business. Profitability metrics also raise concerns; the average return on equity stands at a modest 8.30%, reflecting limited efficiency in generating profits from shareholders’ funds. Furthermore, the company’s ability to service debt is strained, with a high Debt to EBITDA ratio of 6.15 times, suggesting significant leverage and potential financial risk.

Recent Financial Performance

Latest results for the nine months ended September 2025 reveal a 30.79% decline in profit after tax to ₹2.99 crores, underscoring deteriorating earnings. Quarterly net sales have also hit a low of ₹83.78 crores, signalling weak revenue momentum. The company’s dividend payout ratio is currently zero, indicating no returns to shareholders in the form of dividends, which may dampen investor sentiment further.

Valuation and Peer Comparison

On a positive note, Jet Freight Logistics trades at a discount relative to its peers, with an enterprise value to capital employed ratio of 1.1 and a return on capital employed of 9.8%, which some investors may find attractive. However, this valuation advantage has not translated into share price gains, as the stock continues to underperform the broader market and its sector peers.

Conclusion: Why the Stock Is Falling

In summary, Jet Freight Logistics Ltd’s share price decline as of 30-Dec is primarily driven by weak financial fundamentals, including declining profits, flat sales growth, and high leverage. The company’s inability to generate strong returns on equity and its zero dividend payout further contribute to subdued investor confidence. This is compounded by the stock’s persistent underperformance relative to the Sensex and its sector, despite a valuation discount. The recent surge in trading volumes amid falling prices suggests investors are actively repositioning, possibly exiting due to concerns over the company’s long-term prospects. Until there is a clear improvement in earnings growth and financial health, the stock is likely to remain under pressure.

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 →