Why is Shivalik Rasayan Ltd falling/rising?

Recent Price Movements and Market Performance

Shivalik Rasayan’s share price hit a new 52-week low of ₹328 during intraday trading on 08-Jan, marking a 7.9% fall from recent levels. The stock underperformed its sector by 3.2% on the day, with a weighted average price indicating that most trading volume occurred near the lower price points. This downward momentum is further underscored by the stock trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a bearish trend.

Investor participation has increased slightly, with delivery volumes rising by 22.68% on 07-Jan compared to the five-day average, suggesting that some investors are actively trading the stock despite its decline. However, liquidity remains adequate only for relatively small trade sizes, limiting larger institutional interest.

Long-Term Underperformance Against Benchmarks

Over the past year, Shivalik Rasayan’s stock has plummeted by 51.91%, starkly contrasting with the Sensex’s gain of 7.72% during the same period. This trend extends over three and five years, with the stock falling 52.71% and 26.56% respectively, while the Sensex rose 40.53% and 72.56%. Such consistent underperformance highlights the company’s inability to keep pace with broader market growth and investor expectations.

Financial Performance and Valuation Concerns

Despite the steep decline in share price, Shivalik Rasayan maintains a low debt-to-equity ratio of 0.04, which is a positive indicator of financial stability. The company’s return on equity (ROE) stands at a modest 2.4%, and it trades at a price-to-book value of 0.9, suggesting that the stock is valued attractively relative to its peers. However, these valuation metrics have not translated into investor confidence, as the company’s profitability and growth metrics remain weak.

Over the last five years, net sales have grown at an annual rate of 12.50%, but operating profit growth has been negligible at 0.55%. The company’s quarterly profit after tax (PAT) for September 2025 fell sharply by 23.9% to ₹3.05 crore, signalling flat or deteriorating operational performance. Furthermore, the average ROE of 6.12% indicates poor management efficiency and low profitability per unit of shareholders’ funds.

Investor Sentiment and Institutional Interest

Investor sentiment appears subdued, with domestic mutual funds holding no stake in Shivalik Rasayan despite the company’s size. This absence of institutional ownership may reflect a lack of confidence in the company’s business model or valuation at current prices. The consistent underperformance against the BSE500 index over the past three years further dampens the stock’s appeal to long-term investors.

Conclusion: Why the Stock is Falling

The decline in Shivalik Rasayan’s share price on 08-Jan is a reflection of its prolonged underperformance, weak financial results, and lack of institutional support. The stock’s failure to generate meaningful profit growth, coupled with poor management efficiency and flat quarterly earnings, has eroded investor confidence. Despite an attractive valuation on price-to-book metrics, the market remains sceptical due to the company’s inability to deliver consistent returns and growth. This has resulted in the stock trading at new lows and underperforming both its sector and broader market indices.

Investors should carefully consider these factors before taking a position in Shivalik Rasayan, as the current market sentiment and financial indicators suggest continued challenges ahead.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →