Confidence Petroleum India Ltd Upgraded to Hold on Improved Technicals and Financials

Technical Trends Show Signs of Stabilisation

The primary catalyst for the upgrade was a notable change in the technical outlook. Confidence Petroleum’s technical grade moved from bearish to mildly bearish, indicating a tentative shift in market sentiment. Weekly technical indicators such as the MACD and KST have turned mildly bullish, while the Relative Strength Index (RSI) on a weekly basis also signals bullish momentum. However, monthly indicators remain bearish, reflecting lingering caution among longer-term investors.

Specifically, the weekly MACD suggests a potential upward momentum, contrasting with the monthly MACD’s bearish stance. Bollinger Bands on the weekly chart are mildly bearish, but the monthly bands continue to show downward pressure. Moving averages on a daily timeframe remain bearish, underscoring that short-term price action is still under pressure. The Dow Theory readings are mildly bullish weekly but mildly bearish monthly, reinforcing the mixed technical signals.

Overall, these technical nuances suggest that while the stock is not yet in a strong uptrend, the worst of the bearish momentum may be abating, justifying a more neutral Hold rating rather than a Sell.

Valuation Remains Attractive Despite Underperformance

Confidence Petroleum is currently trading at ₹31.91, close to its 52-week low of ₹30.00, and significantly below its 52-week high of ₹63.59. This represents a substantial discount relative to its historical valuations and peer group averages. The company’s Enterprise Value to Capital Employed ratio stands at a low 0.8, indicating undervaluation compared to sector norms.

Return on Capital Employed (ROCE) is at 7.8%, which, while modest, is considered very attractive given the valuation discount. The Price/Earnings to Growth (PEG) ratio is 1, signalling that the stock’s price is fairly aligned with its earnings growth prospects. Despite the stock’s negative price returns over the past year (-44.69%), its profits have increased by 15%, suggesting that the market may be undervaluing the company’s earnings potential.

Financial Trends Reflect Robust Growth and Debt Management

Confidence Petroleum’s financial performance in Q3 FY25-26 has been positive, with net sales reaching ₹1,393.88 crores, marking a 50.0% increase compared to the previous four-quarter average. The company has demonstrated a strong ability to service its debt, with a Debt to EBITDA ratio of 1.31 times, which is considered low and manageable within the industry.

Long-term growth metrics are encouraging, with net sales growing at an annual rate of 41.08% and operating profit expanding at 33.83%. The company has reported positive results for four consecutive quarters, signalling consistent operational improvement. Despite these gains, the stock’s returns have lagged behind the broader market indices, with a one-year return of -44.69% compared to the Sensex’s 10.29% gain and a three-year return of -46.68% versus Sensex’s 38.36% growth.

These figures highlight a disconnect between the company’s improving fundamentals and its stock price performance, which may be attributed to market sentiment or sector-specific challenges.

Quality Assessment and Market Position

Confidence Petroleum holds a Mojo Score of 51.0 and a Mojo Grade of Hold, upgraded from a previous Sell rating on 25 February 2026. The company’s market capitalisation grade is 4, reflecting its mid-tier size within the gas sector. Despite its size and improving fundamentals, domestic mutual funds hold no stake in the company, which could indicate a lack of confidence or insufficient research coverage by institutional investors.

The company operates within the Industrial Gases & Fuels industry, a sector that has faced volatility but also offers long-term growth potential. Confidence Petroleum’s long-term returns are impressive over a decade, with a 547.26% gain compared to the Sensex’s 258.10%, underscoring its capacity for substantial wealth creation over extended periods despite recent underperformance.

Balancing Positives with Caution

While the upgrade to Hold reflects improved technical signals and solid financial trends, investors should remain cautious given the stock’s recent underperformance relative to the broader market and peers. The daily moving averages remain bearish, and monthly technical indicators continue to signal weakness, suggesting that a sustained recovery is not yet assured.

Moreover, the absence of domestic mutual fund participation may indicate lingering concerns about the company’s business model or valuation at current levels. The stock’s discount valuation offers an attractive entry point, but investors should weigh this against the risks of continued volatility in the gas sector and broader economic conditions.

In summary, Confidence Petroleum India Ltd’s upgrade to Hold is supported by a combination of stabilising technicals, attractive valuation metrics, improving financial performance, and a reasonable quality assessment. However, the mixed signals from various parameters counsel a measured approach, favouring cautious accumulation rather than aggressive buying.

Comparative Returns and Market Context

Examining the stock’s returns relative to the Sensex provides further insight. Over the past week, Confidence Petroleum declined by 4.49%, underperforming the Sensex’s 1.74% drop. Over one month, the stock marginally gained 0.19%, lagging behind the Sensex’s 0.91% rise. Year-to-date, the stock is down 12.81% compared to the Sensex’s 3.46% loss. The one-year and three-year returns are significantly negative at -44.69% and -46.68%, respectively, while the Sensex posted gains of 10.29% and 38.36% over the same periods.

These figures highlight the stock’s recent struggles but also underscore its long-term potential, as evidenced by a remarkable 547.26% return over ten years, more than double the Sensex’s 258.10% gain. This long-term outperformance suggests that Confidence Petroleum remains a company with substantial growth capacity, albeit with near-term challenges to overcome.

Conclusion: A Cautious Hold Recommendation

The upgrade of Confidence Petroleum India Ltd’s rating from Sell to Hold by MarketsMOJO reflects a balanced assessment of the company’s current position. Technical indicators show tentative improvement, valuation remains attractive, and financial trends are positive, particularly in recent quarters. However, the stock’s underperformance relative to the market and peers, combined with mixed technical signals and limited institutional interest, warrant a cautious stance.

Investors considering Confidence Petroleum should monitor upcoming quarterly results and sector developments closely, as these will be critical in determining whether the stock can transition from a Hold to a more bullish rating in the near future.

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