Stock Price Movement and Market Context
On the day the new low was recorded, Zodiac Clothing Company Ltd opened with a gap up of 2.7%, reaching an intraday high of Rs.82.97, a 3.53% increase from the previous close. However, the stock reversed course to close at Rs.79.05, down 1.36% on the day, underperforming the Garments & Apparels sector by 0.35%. This closing price represents the lowest level the stock has traded at in the past 52 weeks, a notable decline from its 52-week high of Rs.126.
The stock has experienced a consecutive three-day decline, resulting in a cumulative loss of 6.04% over this period. Additionally, Zodiac Clothing is trading below all key moving averages — 5-day, 20-day, 50-day, 100-day, and 200-day — signalling sustained bearish momentum.
Meanwhile, the broader market has also faced headwinds. The Sensex opened flat but ended the day down 232.10 points, or 0.33%, closing at 82,975.28. The index remains 3.84% below its 52-week high of 86,159.02 and has declined by 3.25% over the past three weeks. Although the Sensex trades below its 50-day moving average, the 50DMA remains above the 200DMA, indicating some underlying market resilience despite recent weakness.
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Financial Performance and Fundamental Assessment
Zodiac Clothing Company Ltd’s financial indicators reveal ongoing challenges that have contributed to the stock’s decline. The company has reported operating losses, which have weighed heavily on its long-term fundamental strength. Over the past five years, operating profit has contracted at an annualised rate of -0.67%, indicating subdued growth in core earnings.
Recent quarterly results have been negative, with the latest reported PAT (Profit After Tax) at Rs. -11.82 crores, representing a 28.7% decline compared to the average of the previous four quarters. This deterioration in profitability has coincided with an increase in the company’s debt levels, with the debt-to-equity ratio reaching 0.62 times at the half-year mark, the highest recorded in recent periods.
The company’s ability to service its debt remains weak, as reflected by a poor EBIT to interest coverage ratio averaging -4.97 over the long term and a quarterly operating profit to interest ratio at a low of -2.45 times. These metrics underscore the financial strain the company is experiencing in meeting its interest obligations.
Stock Valuation and Relative Performance
From a valuation perspective, Zodiac Clothing’s stock is trading at levels considered risky relative to its historical averages. Over the last year, the stock has generated a negative return of -36.40%, significantly underperforming the Sensex, which posted a positive return of 7.64% over the same period. The stock has also lagged behind the BSE500 index across multiple time frames, including the last three years, one year, and three months.
This underperformance is compounded by the company’s modest profit growth of 14.1% over the past year, which has not been sufficient to offset the negative returns experienced by shareholders. The stock’s current Mojo Score stands at 1.0, with a Mojo Grade of Strong Sell, an upgrade from the previous Sell rating as of 7 Feb 2025, reflecting the deteriorated outlook based on fundamental and momentum factors.
Shareholding and Sectoral Context
Zodiac Clothing Company Ltd operates within the Garments & Apparels industry and sector, where it faces competitive pressures and market dynamics that have influenced its performance. The majority shareholding remains with promoters, indicating concentrated ownership.
Despite the sector’s mixed performance, Zodiac Clothing’s stock has notably underperformed its peers and the broader market indices, highlighting company-specific issues that have contributed to its recent price weakness.
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Summary of Key Metrics
The stock’s 52-week high of Rs.126 contrasts sharply with the current low of Rs.79.05, underscoring the extent of the decline. The recent three-day consecutive fall and trading below all major moving averages signal continued downward pressure. The company’s financials reveal operating losses, negative EBITDA, and weak debt servicing capacity, which have contributed to the stock’s Strong Sell rating by MarketsMOJO.
While the broader market has experienced some volatility, Zodiac Clothing’s performance has been notably weaker, with returns lagging the Sensex and sector benchmarks. The company’s elevated debt levels and declining profitability remain areas of concern for stakeholders monitoring its financial health.
Conclusion
Zodiac Clothing Company Ltd’s fall to a 52-week low of Rs.79.05 reflects a combination of subdued financial results, deteriorating profitability, and challenging market conditions. The stock’s underperformance relative to sector peers and the broader market highlights the pressures facing the company. Trading below all key moving averages and with a Strong Sell Mojo Grade, the stock remains under close observation for any shifts in its financial trajectory.
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