Gandhar Oil Refinery Falls 1.91%: Technical Shift and Mixed Financials Shape Week

Monday, 16 February: Downgrade Sparks Caution

On Monday, Gandhar Oil Refinery’s shares opened at Rs.146.50 and closed slightly higher at Rs.146.75, gaining 0.17% despite the announcement of a downgrade to a Sell rating by MarketsMOJO on 13 February. The downgrade reflected concerns over the company’s long-term growth prospects and a shift in technical indicators from sideways to mildly bearish. The stock’s Mojo Score stood at 48.0, signalling increased caution among investors.

The downgrade followed mixed financial results, with the company reporting a strong quarterly profit before tax growth of 44.2% to Rs.41.56 crores, but longer-term sales and operating profit trends remained negative. The stock’s valuation appeared attractive with a low enterprise value to capital employed ratio of 1.1 and a PEG ratio of 0.4, yet the market remained wary given the deteriorating technical outlook.

The broader market was more optimistic, with the Sensex rising 0.70% to 36,787.89, highlighting the stock’s relative underperformance amid sector pressures.

Tuesday, 17 February: Modest Gains Amid Mixed Sentiment

Gandhar Oil Refinery’s stock advanced 0.78% to close at Rs.147.90 on Tuesday, supported by some short-term buying interest. Volume surged to 18,865 shares, indicating increased trading activity. Despite this, the technical momentum remained cautious, with daily moving averages turning bearish and the stock trading below key resistance levels.

The Sensex also gained 0.32%, closing at 36,904.38, but Gandhar Oil’s gains were modest in comparison to the broader market’s resilience. The company’s recent underperformance over one week (-2.46%) and one month (-8.87%) relative to the Sensex’s smaller declines continued to weigh on investor sentiment.

Wednesday, 18 February: Stock Hits Weekly High on Positive Momentum

The stock reached its weekly high of Rs.149.45 on Wednesday, gaining 1.05% on the day. This marked the peak price for the week, supported by some medium-term bullish signals such as the weekly MACD and KST indicators remaining positive despite the overall bearish technical trend. Volume was moderate at 6,463 shares.

However, the broader market’s Sensex also advanced 0.43% to 37,062.35, maintaining upward momentum. The stock’s relative strength was limited, as it continued to face resistance from bearish daily moving averages and a cautious investor base wary of the recent downgrade and mixed financial signals.

Thursday, 19 February: Sharp Decline Amid Market Sell-Off

Thursday saw a sharp reversal as Gandhar Oil Refinery’s shares plunged 2.44% to Rs.145.80, the largest single-day decline of the week. The drop coincided with a broader market correction, with the Sensex falling 1.45% to 36,523.88. The stock’s volume increased slightly to 6,727 shares, reflecting heightened selling pressure.

This decline underscored the bearish technical momentum, with daily moving averages confirming downward pressure. The stock’s underperformance relative to the Sensex intensified, signalling increased risk and investor caution amid sector headwinds and the company’s structural growth challenges.

Friday, 20 February: Week Ends Lower Despite Sensex Gains

On Friday, Gandhar Oil Refinery’s stock closed at Rs.143.70, down 1.44% on the day and marking a 1.91% loss for the week from the opening price of Rs.146.75. Volume rose to 8,314 shares as the stock continued to face selling pressure despite the Sensex gaining 0.41% to 36,674.32.

The technical outlook remained bearish, with the downgrade to Sell rating and mixed financial trends continuing to weigh on sentiment. The stock’s relative weakness contrasted with the broader market’s modest gains, highlighting ongoing challenges for Gandhar Oil Refinery in regaining investor confidence.

Daily Price Comparison: Gandhar Oil Refinery vs Sensex

Key Takeaways

Positive Signals: Gandhar Oil Refinery demonstrated strong quarterly earnings growth with a 44.2% increase in profit before tax excluding other income, and a 38.9% rise in profit after tax, signalling short-term operational improvements. Valuation metrics such as a low PEG ratio of 0.4 and an enterprise value to capital employed ratio of 1.1 suggest the stock is attractively priced relative to its capital base.

Cautionary Signals: Despite recent earnings strength, the company’s long-term sales and operating profit trends remain negative, with annualised declines of -0.83% and -19.77% respectively over five years. The downgrade to a Sell rating reflects concerns over deteriorating technical momentum, which shifted from sideways to mildly bearish during the week. The stock underperformed the Sensex consistently across multiple timeframes, including a 1.91% weekly loss versus a 0.39% gain in the benchmark index. Technical indicators such as daily moving averages and monthly Bollinger Bands reinforce the bearish outlook, while mixed signals from weekly MACD and KST suggest some medium-term support but no clear reversal.

Overall, the week’s developments highlight a challenging environment for Gandhar Oil Refinery, with structural growth concerns and technical weakness outweighing short-term earnings gains. Investors should remain cautious given the prevailing risks and monitor for any signs of sustained recovery before considering exposure.

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