Cords Cable Industries Gains 1.59%: Key Technical Upgrade and Margin Pressures Shape Week

Strong Start on 9 February: Early Momentum Builds

The week began positively for Cords Cable Industries Ltd as the stock surged 3.48% to close at Rs.175.65 on 9 February, significantly outperforming the Sensex’s 1.04% gain that day. This initial momentum was supported by increased trading volume of 1,511 shares, signalling renewed investor interest. The broader market optimism helped lift the stock, setting a bullish tone for the week ahead.

Steady Gains on 10 and 11 February: Price Peaks Amid Upgrade Speculation

On 10 February, the stock continued its upward trajectory, adding 0.40% to close at Rs.176.35, while the Sensex rose 0.25%. The following day, 11 February, saw a more pronounced gain of 1.64%, with the stock reaching Rs.179.25, its weekly high. This price peak coincided with the announcement of an upgrade by MarketsMOJO on 12 February, which was likely anticipated by the market. Volume increased to 2,657 shares on 11 February, reflecting heightened trading activity ahead of the formal rating change.

Upgrade to Hold on 12 February: Technicals and Valuation Improve

The upgrade from 'Sell' to 'Hold' by MarketsMOJO on 12 February marked a pivotal moment for the stock. The rating change was driven by improved technical indicators, including a shift from bearish to mildly bearish momentum on weekly and monthly charts, and a mildly bullish Dow Theory signal. Valuation metrics also supported the upgrade, with a robust Return on Capital Employed (ROCE) of 17.3% and an attractive enterprise value to capital employed ratio of 1.2. Despite a negative one-year stock return of -8.10%, the company’s profits grew by 42.2%, resulting in a low PEG ratio of 0.3, indicating undervaluation relative to earnings growth.

Q3 FY26 Results on 13 February: Margin Pressures Temper Gains

The company reported its Q3 FY26 results on 13 February, revealing revenue growth but mounting margin pressures. While specific revenue figures were not disclosed, the report highlighted that operating profit growth remained modest at 10.50% annually over the past five years. The quarter’s Profit Before Tax excluding other income stood at ₹4.31 crores, growing 48.11% year-on-year, and half-year Profit After Tax was ₹7.45 crores, up 35.21%. Despite these positive earnings trends, the stock declined 2.57% to close at Rs.172.45, underperforming the Sensex’s 1.40% drop, as investors digested the margin concerns and cautious outlook.

Daily Price Comparison: Cords Cable vs Sensex

Key Takeaways

Positive Signals: The upgrade to a Hold rating reflects improved technical momentum and attractive valuation metrics, including a strong ROCE of 17.3% and a low PEG ratio of 0.3. Consistent profit growth, with a 42.2% increase over the past year, and increased institutional interest underpin cautious optimism.

Cautionary Notes: Despite earnings growth, the stock has underperformed the broader market over the past year, and recent quarterly results revealed margin pressures that weighed on the share price. The modest operating profit growth rate of 10.50% over five years suggests limited long-term expansion momentum. The stock’s decline in the last two trading sessions indicates investor concern over these factors.

Conclusion

Cords Cable Industries Ltd demonstrated resilience this week by outperforming the Sensex with a 1.59% gain amid a mixed market environment. The upgrade to a Hold rating by MarketsMOJO on 12 February was a key catalyst, reflecting improved technicals and valuation appeal. However, margin pressures reported in the Q3 FY26 results tempered enthusiasm, leading to a late-week pullback. The stock’s performance highlights a nuanced outlook where improving fundamentals coexist with operational challenges. Investors should monitor upcoming quarterly updates and sector developments to gauge whether the positive momentum can be sustained.

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