Why is Maximus International Ltd falling/rising?

Recent Price Movements and Market Context

Maximus International Ltd’s stock has been on a downward trajectory, losing 7.89% over the past week compared to a modest 1.69% decline in the Sensex. The trend extends over longer periods, with the stock falling 8.97% in the last month and 7.22% year-to-date, while the Sensex has declined by only 1.92% and 1.87% respectively during these intervals. Over the past year, the stock’s performance has been particularly weak, registering a loss of 23.22%, in stark contrast to the Sensex’s gain of 9.56%. This underperformance is even more pronounced over three and five years, where Maximus International has declined by 44.69% and 17.65%, respectively, while the Sensex has surged by 38.78% and 68.97%.

On the day in question, the stock traded close to its 52-week low, just 4.31% above the bottom price of ₹9.76. It has also underperformed its sector by 1.75%, with sector trading down 2.06%, indicating broader sector weakness but a sharper decline in Maximus International’s shares. The stock has been falling for three consecutive days, losing 6.25% in that period, and is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This technical weakness signals a lack of short- and long-term buying interest.

Interestingly, investor participation has increased, with delivery volumes rising by 17.11% on 12 Jan compared to the five-day average, suggesting that some investors may be offloading shares amid the decline. Despite this, liquidity remains adequate for trading, supporting the stock’s continued activity in the market.

Fundamental Strengths Amidst Weak Price Action

Despite the negative price performance, Maximus International Ltd exhibits some fundamental strengths. The company maintains a low Debt to EBITDA ratio of 1.22 times, indicating a strong ability to service its debt obligations. Its return on capital employed (ROCE) stands at 11.8%, which is considered attractive, and the enterprise value to capital employed ratio of 1.6 suggests the stock is trading at a discount relative to its peers’ historical valuations. Furthermore, the company’s profits have increased by 3.8% over the past year, a positive sign amid the broader market challenges.

Majority ownership remains with the promoters, which can be a stabilising factor for the company’s governance and strategic direction. However, these positives have not translated into share price gains, as the stock continues to lag behind market indices and sector peers.

Reasons Behind the Persistent Decline

The primary reasons for the stock’s sustained underperformance lie in its flat financial results and consistent lagging against benchmarks. The company reported flat results in the September 2025 half-year, with a notably low ROCE of 13.72% for the period. Additionally, a significant portion of the company’s profit before tax (37.80%) stems from non-operating income, which may raise concerns about the sustainability of earnings from core operations.

Over the last three years, Maximus International Ltd has consistently underperformed the BSE500 index, reflecting structural challenges in delivering shareholder returns. The stock’s negative returns of 23.22% in the past year, coupled with its failure to keep pace with broader market gains, have likely contributed to investor caution and selling pressure.

Conclusion: A Stock Under Pressure Despite Some Positives

Maximus International Ltd’s share price decline on 13-Jan is a continuation of a longer-term trend of underperformance relative to the Sensex and its sector. While the company demonstrates sound debt management and some profit growth, these factors have not been sufficient to offset concerns over flat recent results, reliance on non-operating income, and persistent underperformance against market benchmarks. The technical weakness, including trading below all major moving averages and proximity to 52-week lows, further compounds the bearish sentiment.

Investors should weigh these factors carefully, considering both the company’s fundamental strengths and its ongoing challenges before making investment decisions.

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