Why is SPIC falling/rising?

Recent Price Movement and Market Context

SPIC’s stock price closed at ₹87.28 on 21 November, down by ₹0.80 or 0.91% from the previous session. This decline is part of a broader short-term downtrend, with the stock having fallen by 5.23% over the last four consecutive trading days. This contrasts with the broader market, where the Sensex has posted gains of 0.79% over the past week and 0.95% over the last month, highlighting a divergence between SPIC’s recent performance and the benchmark index.

The stock is currently trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling a technical weakness in the near term. Additionally, investor participation appears to be waning, as evidenced by a sharp 54.14% drop in delivery volume on 20 November compared to the five-day average. This decline in trading volume suggests reduced enthusiasm among investors, which may be contributing to the recent price softness.

Strong Fundamentals Underpinning Long-Term Growth

Despite the recent price weakness, SPIC’s underlying business fundamentals remain robust. The company has demonstrated healthy long-term growth, with operating profit increasing at an annualised rate of 36.33%. Its net sales for the nine months ended September 2025 stood at ₹2,352.29 crores, reflecting a substantial growth rate of 43.54%. These figures underscore the company’s ability to expand its revenue base effectively.

SPIC also maintains a strong financial position, with a low Debt to EBITDA ratio of 0.60 times, indicating a comfortable capacity to service its debt obligations. This is further supported by an operating profit to interest coverage ratio of 11.06 times, the highest recorded, which highlights the company’s solid earnings relative to its interest expenses.

The company’s efficiency is evident in its debtors turnover ratio, which is at a peak of 335.36 times, suggesting effective management of receivables and cash flow. Moreover, SPIC’s return on equity (ROE) of 14.3% and a price-to-book value of 1.4 indicate an attractive valuation, especially considering the stock trades at a discount relative to its peers’ historical averages.

Over the past year, SPIC has delivered a market-beating total return of 23.45%, significantly outperforming the BSE500 index return of 8.59%. Its profits have grown by 19.6% during the same period, resulting in a low PEG ratio of 0.5, which suggests the stock remains undervalued relative to its earnings growth potential.

Balancing Short-Term Weakness with Long-Term Potential

The recent decline in SPIC’s share price appears to be driven primarily by short-term technical factors and reduced investor participation rather than any deterioration in the company’s fundamentals. The stock’s underperformance relative to the Sensex over the past week and month contrasts with its strong year-to-date and multi-year returns, which have comfortably outpaced the broader market.

Liquidity remains adequate for trading, with the stock’s average traded value supporting reasonable trade sizes, which should help maintain orderly market activity. Investors may view the current price weakness as a temporary correction within a longer-term uptrend supported by solid financial health and growth prospects.

In summary, while SPIC is experiencing a short-term price decline, its strong operational performance, attractive valuation metrics, and market-beating returns over the past year and beyond suggest that the stock remains a compelling holding for investors with a medium to long-term horizon.

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 →