Recent Price Movement and Market Comparison
On 23-Jan, Quest Laboratories Ltd’s stock price fell sharply by ₹9.75, representing a 9.2% decrease. This decline is part of a broader negative trend, with the stock underperforming the benchmark indices over multiple time frames. Over the past week, the stock has lost 4.85%, compared to the Sensex’s 2.51% decline. The one-month performance shows a similar pattern, with Quest Laboratories falling 5.08% against the Sensex’s 4.31% drop. Year-to-date, the stock has declined 12.62%, significantly worse than the Sensex’s 4.14% fall.
Most notably, over the last year, Quest Laboratories has underperformed drastically, with a negative return of 38.77%, while the Sensex has gained 7.94%. This stark contrast highlights the stock’s relative weakness in the market despite broader positive trends in the benchmark.
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Investor Participation and Liquidity
Investor engagement appears to be waning, as evidenced by a sharp 93.75% drop in delivery volume on 22 Jan compared to the five-day average. The delivery volume stood at just 1.2 thousand shares, signalling reduced investor interest or confidence in the stock. Despite this, liquidity remains adequate for trading, with the stock’s traded value supporting reasonable trade sizes.
Financial Performance and Operational Strength
Quest Laboratories demonstrates robust operational metrics that paint a more positive picture beneath the surface. The company boasts a high Return on Capital Employed (ROCE) of 34.54%, indicating efficient use of capital to generate profits. Its Return on Equity (ROE) stands at a respectable 15.1%, and the Price to Book Value ratio of 1.8 suggests the stock is attractively valued relative to its net assets.
Operating profit has grown at an impressive annual rate of 36.74%, reflecting healthy long-term growth. Furthermore, profits have increased by 34% over the past year, a strong fundamental indicator that contrasts with the stock’s negative price performance.
Recent Quarterly Results and Challenges
Despite these positives, recent quarterly results have disappointed investors. Net sales for the quarter ended September 2025 fell by 8.7% to ₹25.62 crores compared to the previous four-quarter average. Additionally, non-operating income accounted for a substantial 35.32% of profit before tax, suggesting that core business profitability may be under pressure.
This combination of flat or declining sales and reliance on non-operating income has likely contributed to the negative sentiment surrounding the stock.
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Summary and Outlook
In summary, Quest Laboratories Ltd’s share price decline on 23-Jan and over recent periods is primarily driven by disappointing quarterly sales performance and significant underperformance relative to the broader market. While the company’s operational efficiency and profit growth remain strong, these fundamentals have not translated into positive stock returns, possibly due to investor concerns over recent sales trends and the quality of earnings.
Investors should weigh the company’s attractive valuation and robust profit growth against the risks posed by flat sales and market underperformance. The stock’s current position below its short-term moving averages, combined with falling investor participation, suggests caution in the near term.
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