Why is Tasty Dairy falling/rising?

Recent Price Movements and Market Context

Tasty Dairy’s share price has been under pressure, with the stock losing 5.48% over the past three consecutive days. Despite a flat one-week return of 0.00%, the stock has significantly lagged behind the broader market indices over longer periods. Over the past month, the stock has declined by 17.37%, while the Sensex has only marginally dipped by 0.23%. More strikingly, the year-to-date performance shows a steep fall of 40.52% for Tasty Dairy, contrasting sharply with the Sensex’s gain of 8.12%. Over the last year, the stock has plummeted by 47.85%, whereas the Sensex has risen by 5.36%. This trend extends over three and five years, with Tasty Dairy’s returns at -65.84% and -74.73% respectively, compared to the Sensex’s robust gains of 37.73% and 79.90%.

Technical Indicators and Investor Participation

From a technical standpoint, the stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bearish momentum. Additionally, investor participation appears to be waning, as evidenced by a sharp 59.66% drop in delivery volume to 3.33 thousand shares on 17 Dec compared to the five-day average. This decline in trading activity suggests reduced confidence among investors, further exacerbating the stock’s downward trajectory. Although liquidity remains adequate for trading, the lack of buying interest is a notable concern.

Fundamental Weaknesses Undermining Confidence

Tasty Dairy’s fundamental profile remains weak, contributing to its poor market performance. The company reports a negative book value, indicating that its liabilities exceed its assets, which is a significant red flag for long-term investors. This weak balance sheet is compounded by a high Debt to EBITDA ratio of -1.00 times, reflecting the company’s limited ability to service its debt obligations effectively. Such financial strain raises concerns about the sustainability of operations and future profitability.

Profitability metrics also paint a bleak picture. The company’s average Return on Equity (ROE) stands at a modest 1.65%, signalling low returns generated on shareholders’ funds. Despite an 81.9% rise in profits over the past year, the stock’s price has declined sharply, suggesting that the market is not convinced by the earnings growth, possibly due to the negative EBITDA and other underlying risks. The flat financial results reported in September 2025 further reinforce the perception of stagnation rather than growth.

Consistent Underperformance Against Benchmarks

Over the last three years, Tasty Dairy has consistently underperformed the BSE500 and other market benchmarks. This persistent lag in returns, coupled with the company’s weak fundamentals, has eroded investor confidence. Institutional investors hold a significant 27.02% stake, which typically indicates a degree of confidence from sophisticated market participants. However, even this level of institutional holding has not been sufficient to arrest the stock’s decline, highlighting the depth of concerns surrounding the company’s prospects.

Conclusion: Why the Stock Is Falling

The decline in Tasty Dairy’s share price as of 18-Dec is primarily driven by its weak financial fundamentals, including a negative book value and poor debt servicing capacity. Despite some profit growth, the company’s negative EBITDA and flat recent results have failed to inspire investor confidence. The stock’s consistent underperformance relative to the Sensex and BSE500 over multiple time frames further compounds concerns. Technical indicators showing the stock trading below all major moving averages, combined with falling investor participation, suggest that market sentiment remains bearish. These factors collectively explain why Tasty Dairy’s stock price is falling despite a backdrop of rising profits, underscoring the importance of evaluating both profitability and balance sheet health when assessing investment prospects.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →