Why is Veejay Lak. Eng. falling/rising?

Persistent Underperformance Against Benchmarks

Veejay Lakshmi Engineering Works has been struggling over multiple time horizons compared to the broader market. Over the past week, the stock has declined by 10.38%, markedly underperforming the Sensex, which fell only 0.63% in the same period. The one-month performance paints an even bleaker picture, with the stock down 18.19% while the Sensex gained 2.27%. Year-to-date, the stock has plummeted 47.67%, in stark contrast to the Sensex's 8.91% rise. Even over the last year, the stock has lost 33.40%, whereas the benchmark index has appreciated by 4.15%. These figures highlight a sustained period of weakness for Veejay Lakshmi Engineering Works, signalling challenges that have weighed heavily on investor confidence.

Technical Indicators and Trading Patterns Signal Weakness

On the day of the decline, the stock traded within a wide intraday range of ₹4.95, reflecting heightened volatility with an intraday volatility measure of 5.04%. The weighted average price indicates that a larger volume of shares exchanged hands closer to the day's low, suggesting selling pressure dominated trading activity. Furthermore, the stock is currently trading below all key moving averages — including the 5-day, 20-day, 50-day, 100-day, and 200-day averages — a technical indication of bearish momentum.

Adding to the negative sentiment, the stock is trading just 4.79% above its 52-week low of ₹44.32, underscoring its proximity to multi-year lows. The recent two-day consecutive fall has resulted in a cumulative loss of 9.61%, reinforcing the downward trajectory. Investor participation appears to be waning as well, with delivery volumes on 05 Dec falling sharply by 88.8% compared to the five-day average, signalling reduced conviction among buyers.

Liquidity and Market Participation

Despite the recent price weakness, the stock remains sufficiently liquid for trading, with the average traded value supporting reasonable trade sizes. However, the sharp decline in delivery volumes suggests that long-term investors are stepping back, possibly awaiting clearer signs of recovery or stability before re-engaging. This reduced investor participation can exacerbate price declines, as fewer buyers are available to absorb selling pressure.

Long-Term Performance Context

While the short-term and medium-term performance of Veejay Lakshmi Engineering Works has been disappointing, the stock has delivered a modest 6.52% return over three years, slightly lagging the Sensex's 36.01% gain. Over five years, however, the stock has outperformed the benchmark with a 92.75% return compared to the Sensex's 86.59%. This suggests that despite recent setbacks, the company has demonstrated resilience over a longer horizon, though recent market dynamics have clearly weighed on its valuation.

Conclusion: Why the Stock is Falling

The decline in Veejay Lakshmi Engineering Works’ share price on 08-Dec is a reflection of sustained negative momentum driven by underperformance relative to market benchmarks, technical weakness, and diminished investor participation. The stock’s proximity to its 52-week low and its trading below all major moving averages indicate persistent bearish sentiment. High intraday volatility and a wide trading range further underscore the uncertainty surrounding the stock. While the company has shown some long-term resilience, recent market conditions and sector challenges have contributed to the sharp price correction. Investors should closely monitor trading volumes and technical indicators for signs of a potential turnaround or further deterioration.

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 →