Why is Coffee Day Enter falling/rising?
As of 29-Aug, Coffee Day Enterprises Ltd's stock price has risen to Rs 50.07, up 17.73%, and has outperformed its sector despite a significant decline in profits and weak long-term fundamentals. Caution is advised for long-term investors due to the company's negative financial indicators and the broader market's downturn.
As of 29-Aug, Coffee Day Enterprises Ltd is experiencing a significant rise in its stock price, currently at Rs 50.07, reflecting an increase of 7.54 or 17.73%. The stock has recently hit a new 52-week high of Rs 50.94 and has outperformed its sector by 17.56%. Over the past week, the stock has gained 13.00%, and year-to-date, it has shown a remarkable return of 120.48%. However, despite this positive movement, the company has reported a concerning decline in profits over the past year, with a return of 31.69% juxtaposed against a -181.6% drop in profits. Additionally, the stock's weak long-term fundamentals, including a -5.57% CAGR growth in net sales over the last five years and a poor EBIT to Interest ratio, may create apprehension among investors.Broader market context indicates that while the stock has been performing well, the benchmark index, Sensex, has shown negative returns of -1.84% over the past week and -1.88% over the past month. This stark contrast highlights Coffee Day Enterprises Ltd's ability to outperform the broader market, which has been struggling. Despite the positive short-term performance, the market's overall decline and the company's weak fundamentals, including high pledged promoter shares and negative results for the last four consecutive quarters, suggest that caution may be warranted for long-term investors.
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