Why is Vikas Lifecare falling/rising?

Persistent Downtrend Reflects Weak Fundamentals

Vikas Lifecare’s share price has been on a steep decline over recent years, with a one-year return of -60.57% and a five-year loss exceeding -76%. This contrasts sharply with the Sensex, which has gained 4.15% over the past year and 86.59% over five years, underscoring the company’s consistent underperformance relative to the broader market. The stock is currently trading just 2.23% above its 52-week low of ₹1.75, signalling sustained investor pessimism.

The company’s financial health remains fragile, with operating losses and a weak ability to service debt. Its average EBIT to interest ratio stands at a negative -0.77, indicating that earnings before interest and tax are insufficient to cover interest expenses. This poor coverage ratio raises concerns about the company’s solvency and financial stability.

Profitability metrics further highlight the challenges faced by Vikas Lifecare. The average return on equity is a mere 1.43%, reflecting minimal returns generated on shareholders’ funds. Such low profitability undermines investor confidence and contributes to the stock’s declining valuation.

Recent Quarterly Results Deepen Concerns

The company’s latest quarterly performance, reported in June 2025, revealed a 23.0% decline in net sales to ₹92.38 crore compared to the previous four-quarter average. This contraction in revenue signals weakening demand or operational challenges. Concurrently, the net loss widened significantly, with a quarterly PAT of -₹3.96 crore, down 56.2% from the prior average. Such a sharp deterioration in profitability exacerbates the negative sentiment surrounding the stock.

Interest expenses have also surged, with a 36.03% increase over nine months to ₹4.04 crore. Rising interest costs amid declining earnings intensify financial strain and reduce the company’s capacity to invest in growth or reduce debt.

Adding to the bearish outlook, Vikas Lifecare’s earnings before interest, taxes, depreciation and amortisation (EBITDA) remain negative, marking the stock as risky compared to its historical valuations. Over the past year, profits have plummeted by over 300%, a stark indicator of operational difficulties.

Sector-wise, the petrochemicals industry, to which Vikas Lifecare is linked, has also experienced a downturn, falling by nearly 3% on the day of the stock’s decline. This sector weakness likely compounds the downward pressure on the company’s shares.

Despite the negative trend, investor participation has shown some signs of increase, with delivery volumes rising by 70.06% on 05 Dec compared to the five-day average. However, this has not translated into price support, as the stock continues to trade below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day levels.

Long-Term Underperformance and Shareholder Composition

Over the last three years, Vikas Lifecare has consistently underperformed the BSE500 index, reflecting persistent challenges in regaining investor trust or improving operational results. The stock’s liquidity remains adequate for small trade sizes, but the overall market sentiment remains cautious.

Notably, the majority of the company’s shares are held by non-institutional investors, which may limit the influence of large institutional shareholders who often provide stability and strategic oversight. This shareholder structure could contribute to volatility and subdued demand for the stock.

In summary, Vikas Lifecare’s share price decline on 08-Dec is primarily attributable to its weak financial fundamentals, deteriorating quarterly results, rising interest costs, and sector-wide pressures. The stock’s persistent underperformance relative to benchmarks and negative profitability metrics continue to weigh heavily on investor sentiment.

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 →