The stock's latest movement shows a modest day change of 0.55%, outperforming its sector by 0.33% on the day. Despite this slight uptick following two consecutive days of decline, Credo Brands Marketing remains below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. This positioning indicates a sustained bearish trend over multiple time horizons.
Over the past year, Credo Brands Marketing's stock price has declined by 41.41%, a stark contrast to the Sensex's 9.25% gain during the same period. The stock's 52-week high was Rs.213.7, underscoring the extent of the downward movement. This underperformance is also evident when compared to the BSE500 index, where the stock has lagged over the last three years, one year, and three months.
Financially, the company has exhibited subdued growth metrics. Operating profit has shown an annual rate of change of -7.83% over the last five years, indicating challenges in expanding core profitability. The latest six-month period reveals a PAT of Rs.25.17 crores, which has declined by 30.53%, signalling pressure on net earnings in the near term.
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Institutional investor participation has also shifted, with a decrease of 1.34% in their stake over the previous quarter. Currently, institutional investors hold 2.88% of the company’s shares. Given their analytical resources, this reduction may reflect a reassessment of the company's fundamentals.
Despite these challenges, Credo Brands Marketing demonstrates certain strengths. The company reports a high return on capital employed (ROCE) of 17.54%, indicating efficient utilisation of capital in generating earnings. Additionally, the debt to EBITDA ratio stands at a low 1.31 times, suggesting a manageable debt load relative to earnings before interest, tax, depreciation, and amortisation.
Valuation metrics also present an interesting picture. With a ROCE of 18.5 and an enterprise value to capital employed ratio of 1.4, the stock is trading at a discount relative to its peers' historical averages. This valuation context is notable given the stock’s return of -41.06% over the past year and a profit decline of 2.6% during the same timeframe.
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In the broader market context, the Sensex opened flat with a minor decline of 29.24 points but has since traded positively, currently at 84,755.06, representing a 0.1% gain. The index remains 0.63% below its 52-week high of 85,290.06 and is trading above its 50-day moving average, which itself is positioned above the 200-day moving average, signalling a bullish trend for the benchmark. Mega-cap stocks are leading this market advance.
Credo Brands Marketing offers a dividend yield of 3.02% at the current price, which is relatively attractive within its sector. However, the stock’s price remains subdued, reflecting the cumulative impact of its financial performance and market sentiment.
Overall, the stock’s fall to Rs.97.2 marks a significant point in its price history, underscoring the challenges faced by the company in both long-term growth and recent earnings. While certain financial ratios indicate operational efficiency and manageable leverage, the stock’s valuation and price trend continue to reflect cautious market appraisal.
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