Recent Price Movement and Market Comparison
The stock has been on a downward trajectory over multiple time frames. In the past week, Lexus Granito’s shares fell by 2.86%, contrasting with the Sensex’s modest gain of 0.51%. Over the last month, the stock declined by 4.33%, underperforming the benchmark’s 2.02% fall. Year-to-date, the stock has dropped 5.10%, nearly double the Sensex’s 2.72% decline. Most strikingly, over the last year, Lexus Granito’s shares have plummeted by 39.76%, while the Sensex has appreciated by 9.74%. This stark divergence highlights the stock’s sustained weakness amid broader market strength.
Today, the stock hit a new 52-week low of ₹24.43, signalling persistent selling pressure. It also underperformed its sector by 2.26% on the day. Technical indicators reinforce this bearish sentiment, with the share price trading below all major moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Such positioning typically suggests a lack of near-term buying interest and potential continuation of the downtrend.
Interestingly, investor participation has increased, as evidenced by a 62.66% rise in delivery volume on 28 Jan compared to the five-day average. This heightened activity may indicate that some investors are exiting positions amid the negative momentum.
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Fundamental Challenges Weighing on the Stock
Despite some positive operational results reported in September 2025, including a 27.23% growth in quarterly net sales to ₹22.10 crore and a modest profit after tax of ₹0.99 crore over the latest six months, the company’s financial health remains fragile. Lexus Granito carries a heavy debt burden, with a debt-to-equity ratio of 14.9 times, indicating significant leverage. This high level of debt raises concerns about the company’s long-term sustainability and ability to meet its obligations.
The company’s debt servicing capacity is further strained, as reflected by a debt-to-EBITDA ratio of 6.18 times. Such a ratio suggests that earnings before interest, taxes, depreciation, and amortisation are insufficient to comfortably cover debt repayments, increasing financial risk.
Moreover, the company has reported losses, resulting in a negative return on equity (ROE). Its return on capital employed (ROCE) stands at -2.2%, signalling inefficient use of capital and operational challenges. Although the stock’s valuation appears discounted relative to peers, with an enterprise value to capital employed ratio of 1.7, this does not offset the fundamental weaknesses.
Over the past year, while profits have risen by an impressive 110.2%, the stock’s price has declined sharply, leading to a low price/earnings to growth (PEG) ratio of 0.3. This disparity suggests that the market remains sceptical about the company’s prospects despite improving earnings, likely due to concerns over its debt and profitability metrics.
The stock’s long-term performance also paints a bleak picture. Over three years, it has lost 64.10% of its value, significantly underperforming the BSE500 index, which gained 44.39% in the same period. Even over five years, the stock’s 17.39% gain pales in comparison to the Sensex’s 86.43% rise, underscoring persistent underperformance.
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Conclusion: Why the Stock Is Falling
The decline in Lexus Granito’s share price on 29-Jan and its broader downtrend can be attributed to a combination of weak financial fundamentals, high leverage, and sustained underperformance relative to market benchmarks. Despite some recent sales growth and profit improvement, the company’s heavy debt load and negative returns on equity and capital employed undermine investor confidence. The stock’s technical indicators and new 52-week lows further reinforce bearish sentiment, while increased investor participation suggests active selling pressure.
In summary, the stock’s fall reflects market concerns over the company’s ability to sustain growth and profitability amid financial strain, making it a challenging proposition for investors seeking stable returns in the current environment.
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