Recent Price Movement and Market Context
On 14 January, Shivalik Rasayan’s shares closed near their 52-week low, just 0.61% above the lowest price of ₹328 recorded within the past year. The stock underperformed its sector by 2.39% on the day, hitting an intraday low of ₹328.20, down 2.6%. Notably, the share price is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained downward momentum.
Investor participation has also waned, with delivery volumes on 13 January falling by 18.3% compared to the five-day average, indicating reduced buying interest. Despite this, liquidity remains adequate for modest trade sizes, with average traded value supporting transactions up to ₹0.03 crore.
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Long-Term Underperformance and Financial Challenges
Over the past year, Shivalik Rasayan’s stock has plummeted by 54.01%, starkly contrasting with the Sensex’s 9.00% gain during the same period. This trend extends over three and five years, with the stock declining 55.23% and 30.22% respectively, while the Sensex rose 38.37% and 68.16%. Such consistent underperformance highlights structural challenges within the company and investor scepticism.
Financially, the company exhibits poor management efficiency, reflected in a low average Return on Equity (ROE) of 6.12%, indicating limited profitability relative to shareholders’ funds. Although the current ROE stands at 2.4, the valuation remains attractive with a Price to Book Value of 0.9, suggesting the stock trades at a discount compared to peers’ historical averages. However, this valuation appeal has not translated into positive returns for investors.
Growth metrics further underscore the company’s struggles. Net sales have expanded at a modest annual rate of 12.50% over five years, while operating profit growth is negligible at 0.55%. The latest quarterly results for September 2025 reveal a 23.9% decline in Profit After Tax (PAT) to ₹3.05 crore, signalling recent operational setbacks.
Investor confidence appears limited, as evidenced by domestic mutual funds holding virtually no stake in the company. Given their capacity for thorough research, this absence may reflect concerns about the company’s business prospects or valuation.
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Conclusion: Why the Stock is Falling
Shivalik Rasayan Ltd’s share price decline is primarily driven by its sustained underperformance against market benchmarks and sector peers, coupled with disappointing financial results and weak profitability metrics. The stock’s proximity to its 52-week low and trading below all major moving averages reflect persistent selling pressure. Additionally, falling investor participation and negligible mutual fund interest further dampen demand.
While the company benefits from a low debt-to-equity ratio and a valuation discount, these positives are overshadowed by poor management efficiency, flat profit growth, and recent quarterly earnings declines. The lack of confidence from institutional investors and consistent negative returns over multiple years suggest that market participants remain cautious about the stock’s prospects.
Investors should weigh these factors carefully, considering the company’s fundamental challenges and historical performance before making investment decisions.
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