Recent Price Movement and Market Context
The stock has been under pressure for several sessions, falling for two consecutive days with a cumulative loss of nearly 7%. On the day in question, it opened with a gap down of 2.01% and touched an intraday low of ₹29.10, representing a 7.21% decline from previous levels. Notably, the weighted average price indicates that a larger volume of shares traded closer to the day’s low, signalling selling pressure among investors. Furthermore, Natraj Proteins is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, underscoring a bearish technical trend.
Underperformance Against Benchmarks
Over the past week, the stock has declined by 8.07%, sharply contrasting with the Sensex’s modest gain of 0.31%. This underperformance extends over longer periods as well, with the stock down 6.46% over one month compared to the Sensex’s 2.51% loss, and a year-to-date decline of 8.13% versus the benchmark’s 3.11% fall. More strikingly, the stock has delivered a negative return of 33.08% over the past year, while the Sensex has appreciated by 7.88%. Over three years, the divergence is even more pronounced, with Natraj Proteins down 46.84% against the Sensex’s 39.16% gain. This consistent lagging performance highlights the company’s struggles to keep pace with broader market gains.
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Fundamental Weaknesses Weighing on the Stock
Despite a seemingly attractive valuation, with a return on capital employed (ROCE) of 1 and an enterprise value to capital employed ratio of 0.6, the company’s fundamentals remain weak. The average return on equity (ROE) stands at a modest 6.97%, indicating low profitability relative to shareholders’ funds. More concerning are the recent financial results for the nine months ended September 2025, which reveal a 23.59% decline in net sales to ₹76.54 crore. The quarterly profit before depreciation, interest, and taxes (PBDIT) was negative at ₹-1.02 crore, and the operating profit margin to net sales dropped to a low of -3.79%. These figures point to operational challenges and losses that undermine investor confidence.
Shareholding and Liquidity Considerations
The majority of shares are held by non-institutional investors, which may contribute to volatility given the potential for retail-driven trading patterns. However, liquidity remains adequate, with the stock’s traded value sufficient to accommodate sizeable trades without significant price disruption. Notably, delivery volumes surged by nearly 285% on 28 January compared to the five-day average, suggesting increased investor participation, albeit amid a falling price trend.
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Long-Term Performance and Outlook
Over the last five years, Natraj Proteins has delivered a positive return of 71.93%, which, while respectable, still trails the Sensex’s 78.38% gain. The persistent underperformance over the past three years and the negative returns over the last year reflect ongoing structural issues within the company. The combination of operating losses, declining sales, and weak profitability metrics has eroded investor sentiment, leading to the current downtrend in the stock price. The proximity to its 52-week low, just 4.76% above ₹28, further emphasises the stock’s vulnerability in the near term.
Conclusion
Natraj Proteins Ltd’s recent share price decline is primarily driven by disappointing financial results, including shrinking sales and operating losses, coupled with sustained underperformance relative to market benchmarks. Despite an attractive valuation on certain metrics, the company’s weak profitability and negative quarterly earnings have weighed heavily on investor confidence. The stock’s technical indicators and increased selling volumes reinforce the bearish sentiment, suggesting that the stock may continue to face headwinds unless there is a marked improvement in operational performance and financial health.
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