Neuland Labs, Solara, Paradeep lead Indian stock market losers amid broad-sector pressures

India’s equity markets witnessed significant profit-booking in mid- and small-cap stocks on May 16, 2025, with a sharp selloff concentrated in pharmaceutical, chemical, and infrastructure-related counters. The BSE and NSE Top Losers list was led by Neuland Laboratories, Solara Active Pharma, Paradeep Phosphates, and AJAX Engineering, all of which recorded single-day declines between 6% and 14%. This comes amid persistent macroeconomic uncertainty, subdued earnings sentiment in select sectors, and ongoing caution ahead of key domestic and global monetary policy signals.

The Nifty 50 closed relatively flat, but broader indices underperformed, with the Nifty Midcap 100 down 1.6% and the Smallcap 250 down 2.1%. Foreign institutional investors (FIIs) were net sellers for the second consecutive session, according to provisional data from the exchanges.

Why Did Neuland Laboratories Stock Fall?

Neuland Laboratories Ltd was among the steepest losers on May 16, dropping 6.91% to ₹11,040.00 from the previous close of ₹11,859.00. The stock saw significant volumes, with 2.55 lakh shares traded for a total turnover of ₹282.6 crore. Despite no material news from the company, investors appeared to be taking profits after a strong rally earlier this quarter. Concerns about global API pricing pressure and regulatory bottlenecks in exports also weighed on investor sentiment. The stock’s valuation had stretched post-earnings, prompting analyst caution, especially with sector-wide re-rating already priced in.

What Caused Solara Pharma to Drop on May 16?

Solara Active Pharma Sciences Ltd declined 8.02% to ₹477.00. The sharp fall came amid weak sentiment in the broader pharmaceutical sector, with investors turning cautious on mid-tier API suppliers. Solara reported margin contraction in its latest quarterly filing and noted elevated input cost pressure. Analysts flagged potential risks to FY26 earnings guidance amid raw material inflation and lingering overcapacity in regulated markets. Around 6.5 lakh shares changed hands, valuing the day’s trade at ₹31.4 crore.

Why Did Paradeep Phosphates Stock Decline Sharply?

Paradeep Phosphates Ltd fell 7.61% to ₹145.22. The decline coincided with concerns over potential delays in fertilizer subsidy disbursement by the Indian government as part of broader fiscal tightening measures. Additionally, rising international feedstock prices—particularly ammonia and phosphoric acid—have squeezed operating margins for players in the fertilizer sector. High volumes of over 81 lakh shares (₹120.9 crore) suggest institutional selling amid fund manager realignment.

What Led to AJAX Engineering’s 9.73% Loss?

AJAX Engineering Ltd dropped nearly 10% to ₹670.05. The capital goods player, which had seen momentum in the last few months on infrastructure optimism, is now seeing outflows as government project execution remains slow. Delay in capital expenditure utilization and tepid fresh tender activity, especially in the construction machinery segment, drove investor caution. Trade turnover stood at over ₹40.7 crore, driven largely by domestic institutional selling.

Why Did Ddev Plastiks Lose Over 11%?

Ddev Plastiks Industries Ltd saw a sharp 11.83% correction to ₹275.50, extending a recent downtrend after hitting overbought levels. Analysts attributed the fall to stretched valuations and selling pressure in the specialty chemicals pack. The company, which manufactures engineering plastics and polymers, faces margin stress from volatility in crude-linked input prices. Over 8.3 lakh shares were traded, totaling more than ₹23 crore in turnover.

Why Did NOCIL Stock Slide on May 16?

NOCIL Ltd, India’s leading rubber chemical manufacturer, declined 6.10% to ₹184.30 amid continued stress in the auto ancillaries supply chain. Despite the recent recovery in automobile sales, tyre manufacturers have reduced inventory procurement, impacting chemical volumes. High inventory levels, weak export orders, and pricing pressure contributed to investor exits. The stock saw a turnover of ₹25.9 crore on 13.9 lakh shares traded.

What Drove Losses in Datamatics Global Services?

Datamatics Global Services Ltd fell 6.41% to ₹617.90, impacted by a broader correction in midcap IT and tech services counters. With global IT spending forecasts revised down by leading research firms, mid-tier Indian players are expected to face delays in deal ramp-ups. Datamatics, which recently hit 52-week highs, also faced profit-taking from retail and HNI investors. Daily trade stood at ₹21.2 crore.

Manorama, Medi Assist, and Khaitan Among Midcap Casualties

Manorama Industries Ltd declined 5.62% to ₹1,385.00 amid weak sentiment in agri-processing and export-driven consumer stocks. The company, which deals in specialty fats, is reportedly facing export order delays due to port congestion in Africa and South America.

Medi Assist Healthcare Services Ltd lost 5.18% to ₹467.00. Health-tech and TPA companies are under pressure from proposed regulatory tightening on insurance commissions and package rates, which could erode profit margins.

Khaitan (India) Ltd dropped 9.02% to ₹106.76 as weak rural demand and competition in electricals weighed on price performance. The drop followed muted guidance from peer firms in the durables space.

Small-Cap Names See Steep Losses on Low Liquidity

Lloyds Engineering Works Ltd was the top loser, falling 13.94% to ₹15.50. The counter saw heavy volumes exceeding 90 lakh shares and ₹15 crore in value, suggesting retail unwinding after a speculative rally.

Setco Automotive Ltd lost 5.03% to ₹19.27. The clutch systems maker has seen limited traction on its restructuring plans, with investors exiting over low order visibility and high leverage.

Pricol Ltd dropped 5.54% to ₹438.95 amid auto-component industry fatigue. Analysts believe a pause in EV component order flows and pressure from OEM inventory adjustments have hurt short-term visibility.

MITCON Consultancy & Engineering Services Ltd slipped 5.37% to ₹73.80. The company’s order book has seen limited replenishment, and broader infrastructure delays may hurt its FY26 pipeline.

ATLANTAA Ltd fell 5.00% to ₹38.38 as infrastructure-linked stocks corrected on absence of any project wins or monetization triggers.

IRIS Business Services Ltd, despite very low volumes, saw a 4.99% decline to ₹271.45. The fall was largely technical, with limited fundamental triggers.

Institutional Sentiment and Fund Flows on May 16

FIIs were net sellers on May 16, continuing the trend from earlier this week. As per exchange data, they offloaded ₹1,122 crore in Indian equities. DII participation remained neutral, with domestic funds focusing on large-cap rotation. Mid- and small-cap funds saw net outflows from healthcare, chemical, and infrastructure segments. Traders also noted increased short positions in NSE derivative counters related to Solara, AJAX, and NOCIL.

What’s Next for Indian Stocks Under Pressure?

Analysts expect volatility to persist in Indian midcaps over the coming weeks, especially in high-beta names sensitive to commodity and global trade dynamics. With the Reserve Bank of India expected to maintain a cautious stance in its June meeting, and the U.S. Fed maintaining hawkish commentary on rate cuts, risk-off sentiment may continue.

For pharma and specialty chemical stocks, Q1 FY26 results and margin commentary will be crucial. In capital goods and engineering, visibility on order execution from public sector projects could revive interest. However, in the absence of positive earnings or policy triggers, institutional flows may remain skewed towards large-cap defensives.