Why is Concord Drugs falling/rising?

Jun 26 2025 09:22 PM IST
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As of 26-Jun, Concord Drugs Ltd is priced at 31.80, showing a short-term outperformance but significant long-term underperformance with a -22.80% return over the past year. The company's weak financial health and declining profits raise concerns despite its attractive valuation.
As of 26-Jun, Concord Drugs Ltd is currently priced at 31.80, reflecting an increase of 0.8 or 2.58%. The stock has outperformed its sector today by 2.5%, although it is trading above its 5-day, 20-day, and 50-day moving averages, while remaining below its 100-day and 200-day moving averages. Over the past week, the stock has shown a return of +3.28%, which is better than the Sensex's +2.94%. However, the stock's performance over the longer term remains concerning, with a -22.80% return over the past year and a -16.32% year-to-date return. The company has a weak long-term fundamental strength, indicated by a -4.49% CAGR growth in operating profits over the last five years and a low return on equity of 1.83%.

In the broader market context, while Concord Drugs has outperformed the benchmark in the short term, it has significantly lagged behind over the longer periods, underperforming the BSE 500 in the last three years, one year, and three months. The company's ability to service its debt is weak, with a poor EBIT to interest ratio of 1.46, which raises concerns about its financial health. Despite a very attractive valuation with a return on capital employed of 5.3 and trading at a discount compared to peers, the stock's recent price movement may not be enough to offset the negative sentiment stemming from its declining profits and overall weak performance metrics.
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