Why is Cartrade Tech falling/rising?

Short-Term Price Movement and Market Context

Cartrade Tech’s stock price fell by ₹91.6 on 21 November, underperforming its sector by 2.4% and touching an intraday low of ₹2,992, a 3.4% drop from previous levels. The weighted average price indicates that a larger volume of shares traded closer to the day’s low, signalling selling pressure. The stock’s current price remains above its 20-day, 50-day, 100-day, and 200-day moving averages, yet it is below the 5-day moving average, suggesting a short-term correction within an overall upward trend.

Investor participation has also waned, with delivery volumes on 20 November falling by over 51% compared to the five-day average, indicating reduced conviction among traders. Despite this, liquidity remains sufficient for trades up to ₹2.07 crore, ensuring that the stock remains accessible to market participants.

Strong Long-Term Performance and Fundamentals

Despite the recent dip, Cartrade Tech has demonstrated exceptional long-term growth. Over the past year, the stock has surged by 135.75%, vastly outperforming the Sensex’s 10.47% gain. Year-to-date returns stand at an impressive 102.34%, while the three-year return exceeds 513%, underscoring the company’s sustained value creation for shareholders.

The company’s fundamentals remain robust, with an average debt-to-equity ratio of zero, indicating a clean balance sheet and minimal financial risk. Operating profit has grown at an annualised rate of 48.04%, reflecting strong operational efficiency. The latest quarterly results, declared in September 2025, showed a 36.17% increase in net profit, marking the 14th consecutive quarter of positive earnings growth. Additionally, the company reported its highest quarterly net sales at ₹193.41 crore and a return on capital employed (ROCE) of 9.44%, signalling effective capital utilisation.

Institutional investors hold a significant 78.46% stake in Cartrade Tech, with their share increasing by 0.67% over the previous quarter. This high level of institutional ownership often reflects confidence in the company’s prospects, given these investors’ resources and analytical capabilities.

Valuation Concerns Tempering Investor Sentiment

While Cartrade Tech’s growth story is compelling, valuation metrics suggest the stock is trading at a premium. The price-to-book value stands at 6.2, significantly higher than peer averages, indicating that investors are paying a steep price for the company’s assets. The return on equity (ROE) is relatively modest at 8%, which, when juxtaposed with the high valuation, raises questions about the sustainability of current price levels.

Moreover, although the stock’s profits have risen by 121.2% over the past year, the price appreciation of 135.75% suggests that some of the gains may already be priced in. The price-to-earnings-to-growth (PEG) ratio of 0.7 indicates that while the stock is not excessively overvalued relative to its growth, the premium valuation could be a factor behind the recent profit-taking and short-term price decline.

In summary, the recent fall in Cartrade Tech’s share price on 21 November appears to be a short-term correction amid a backdrop of strong long-term fundamentals and impressive returns. The dip may reflect profit-booking by investors wary of the stock’s elevated valuation and reduced trading volumes, rather than any deterioration in the company’s operational performance.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →