Why is Kridhan Infra falling/rising?

Recent Price Movement and Market Comparison

While Kridhan Infra has posted gains of 1.51% over the last week and 8.89% in the past month, these short-term improvements contrast sharply with its longer-term performance. Year-to-date, the stock remains down by 30.22%, and over the last twelve months, it has plummeted by 43.26%. This stark underperformance is particularly notable when compared to the Sensex, which has delivered positive returns of 8.12% YTD and 5.36% over the last year. Over three and five years, the stock’s returns of 4.94% and 3.86% respectively lag far behind the Sensex’s robust 37.73% and 79.90% gains.

Investor Participation and Liquidity Concerns

On 17 Dec, delivery volume for Kridhan Infra dropped sharply by 62.29% compared to its five-day average, signalling waning investor interest. Although the stock remains liquid enough for trading, the decline in participation suggests caution among shareholders. The stock’s price today underperformed its sector by 8.29%, and its moving averages reveal a mixed technical picture: it trades above its 20-day, 50-day, and 100-day averages but remains below its 5-day and 200-day averages, indicating short-term weakness amid longer-term support levels.

Fundamental Weaknesses Weighing on the Stock

Kridhan Infra’s fundamental metrics paint a challenging picture. The company carries a negative book value, which is a significant red flag indicating that liabilities exceed assets. This weakens its long-term financial strength and raises concerns about solvency. The average Return on Equity (ROE) stands at a modest 8.20%, reflecting low profitability relative to shareholders’ funds. Furthermore, the company’s Return on Capital Employed (ROCE) for the half-year ended September 2025 was negative at -1.49%, underscoring inefficiencies in generating returns from capital invested.

Cash reserves are minimal, with cash and cash equivalents reported at just ₹0.43 crore in the same period, limiting the company’s ability to fund operations or invest in growth without external financing. Despite these challenges, the company’s profits have reportedly risen by over 100% in the past year, which is somewhat at odds with the stock’s steep decline. This discrepancy is reflected in a low PEG ratio of 0.4, suggesting that the market is pricing in significant risk or uncertainty about the sustainability of earnings growth.

Market Underperformance and Risk Factors

Over the last year, Kridhan Infra has underperformed not only the Sensex but also the broader BSE500 index, which returned 2.20% in the same period. The stock’s 43.26% loss contrasts sharply with the market’s modest gains, highlighting investor scepticism. The majority of shareholders are non-institutional, which may contribute to volatility and less stable ownership. The stock’s valuation is considered risky relative to its historical averages, further deterring long-term investors.

Conclusion: Why Kridhan Infra Is Falling

The recent decline in Kridhan Infra’s share price on 18-Dec is primarily driven by its weak fundamental position, including a negative book value and poor returns on capital. Despite some profit growth, the market remains unconvinced about the company’s long-term viability and growth prospects. Reduced investor participation and underperformance relative to benchmarks further exacerbate selling pressure. The stock’s technical indicators also suggest short-term weakness, reinforcing the cautious stance among traders and investors. Until Kridhan Infra can demonstrate stronger financial health and consistent profitability, its shares are likely to remain under pressure.

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