Why is Sandesh falling/rising?

Recent Price Movement and Market Context

On 05-Dec, Sandesh Ltd. closed at ₹1,051.10, down ₹47.20 or 4.3% from the previous session. The stock has been on a consistent downward trajectory, losing value for six consecutive days and registering a cumulative decline of 5.12% during this period. Intraday trading saw the stock touch a low of ₹1,051.10, with heavier volumes concentrated near these lower price levels, signalling selling pressure. Furthermore, Sandesh 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 outlook.

Comparatively, the broader Sensex index has remained resilient, posting modest gains of 0.01% over the past week and 2.70% over the last month, while Sandesh has declined by 4.77% and 9.78% respectively over the same periods. Year-to-date, the stock has plummeted 34.36%, starkly contrasting with the Sensex’s 9.69% rise. Over the past year, Sandesh’s returns have been negative 37.43%, while the Sensex gained 4.83%. This persistent underperformance highlights the stock’s struggle to keep pace with the broader market.

Fundamental Weaknesses Driving the Decline

Sandesh’s share price decline is underpinned by significant fundamental challenges. Over the past five years, the company’s operating profits have contracted at a staggering compound annual growth rate (CAGR) of -175.51%, signalling severe erosion in core profitability. The average return on equity (ROE) stands at a modest 9.98%, indicating limited efficiency in generating profits from shareholders’ funds.

The company’s latest quarterly results, released in September 2025, further exacerbate concerns. Profit after tax (PAT) for the quarter was ₹3.86 crore, marking a sharp 81.6% decline compared to the average of the previous four quarters. Additionally, the return on capital employed (ROCE) for the half-year period hit a low of 3.64%, reflecting poor utilisation of capital resources. The debtors turnover ratio, a measure of how efficiently the company collects receivables, also fell to a low of 5.26 times, suggesting potential issues with working capital management.

These weak financial metrics contribute to the perception of Sandesh as a risky investment. The stock’s earnings before interest, taxes, depreciation and amortisation (EBITDA) have turned negative, and profits have declined by 77.1% over the past year. This deterioration in profitability has not gone unnoticed by institutional investors; domestic mutual funds hold no stake in the company, which may indicate a lack of confidence in its business prospects or valuation.

Market Liquidity and Investor Sentiment

Investor participation in Sandesh shares has also waned. Delivery volumes on 04 Dec fell by nearly 49% compared to the five-day average, signalling reduced buying interest. Although the stock remains sufficiently liquid for sizeable trades, the declining volume and price action suggest that sellers currently dominate the market. The stock’s proximity to its 52-week low, just 4.86% above ₹1,000, adds to the bearish sentiment, as investors may be wary of further downside risk.

Sandesh’s underperformance extends beyond the short term. Over three and five years, the stock has delivered returns of 25.88% and 83.47% respectively, both trailing the Sensex’s corresponding gains of 36.41% and 90.14%. This persistent lag relative to benchmark indices and sector peers reinforces the narrative of a company struggling to generate sustainable growth and shareholder value.

Conclusion: Why Sandesh Is Falling

In summary, Sandesh Ltd.’s share price decline as of 05-Dec is a reflection of its deteriorating financial health, poor recent earnings performance, and lack of institutional support. The company’s negative profit growth, low returns on equity and capital, and negative EBITDA have eroded investor confidence. This is compounded by technical weakness, with the stock trading below all major moving averages and near its 52-week low. Reduced investor participation and consistent underperformance relative to the Sensex and sector benchmarks further weigh on the stock.

Given these factors, Sandesh’s current market behaviour is consistent with a stock facing fundamental and sentiment-driven headwinds, resulting in sustained selling pressure and a falling share price.

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