Why is Loyal Equipments falling/rising?

Recent Price Movement and Market Context

The stock hit a new 52-week low of ₹178.35 during the trading session, underscoring the persistent selling pressure. Despite an intraday high of ₹192.80, the weighted average price indicates that most trading volume occurred near the lower end of the day’s range, signalling bearish sentiment. Loyal Equipments has now declined for six consecutive trading days, losing 13.09% in that period alone. This underperformance is more pronounced when compared to the Engineering - Industrial Equipments sector, which itself fell by 2.29% on the same day.

Further technical weakness is evident as the stock trades below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — suggesting a sustained downtrend. Investor participation has increased, with delivery volumes on 20 Nov rising by 175.82% compared to the five-day average, indicating heightened selling activity.

Long-Term Underperformance Against Benchmarks

Loyal Equipments has underperformed the broader market significantly over the past year and beyond. While the Sensex has delivered a 10.47% return over the last 12 months, the stock has declined by 31.30%. Year-to-date, the stock is down 34.55%, contrasting sharply with the Sensex’s 9.08% gain. Even over shorter periods such as one month and one week, the stock has posted losses of 16.88% and 12.75% respectively, while the benchmark indices have recorded modest gains. This persistent underperformance has eroded investor confidence and contributed to the ongoing price decline.

Financial Performance and Valuation Concerns

The company’s recent financial results have been a key driver of the negative sentiment. For the six months ending September 2025, Loyal Equipments reported a profit after tax (PAT) of ₹2.26 crore, representing a sharp decline of 43.92%. Profit before tax (PBT) excluding other income fell even more steeply by 64.44% to ₹1.44 crore. These results highlight a significant contraction in profitability, which has weighed heavily on the stock price.

Despite a relatively high return on capital employed (ROCE) of 18.27% and a return on equity (ROE) of 16.7%, the company’s valuation metrics suggest a cautious stance among investors. The price-to-book value ratio stands at 3.7, indicating a fair valuation but trading at a discount compared to peers’ historical averages. However, the decline in profits by 5.8% over the past year and the lowest half-year ROCE of 20.76% signal operational challenges that have not been fully priced in by the market.

Sector and Shareholding Dynamics

The Engineering - Industrial Equipments sector itself has experienced a downturn, which has compounded the pressure on Loyal Equipments. The stock’s performance today lagged the sector by 2.07%, reflecting company-specific weaknesses. Promoters remain the majority shareholders, but the lack of positive catalysts and deteriorating financials have overshadowed any potential support from insider holdings.

Conclusion: Why Loyal Equipments Is Falling

The decline in Loyal Equipments’ share price on 21-Nov is primarily attributable to a combination of weak recent financial results, sustained underperformance relative to market benchmarks, and technical indicators signalling bearish momentum. The company’s shrinking profits and disappointing half-year earnings have undermined investor confidence, while the stock’s failure to hold above key moving averages and its new 52-week low reinforce the negative trend. Although the company maintains reasonable management efficiency and valuation metrics, these positives have been overshadowed by operational challenges and sector-wide weakness. As a result, the stock continues to face selling pressure, reflecting a cautious outlook among investors.

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