Why is Creative Newtech Ltd falling/rising?

Recent Price Performance and Market Context

Creative Newtech’s shares have been on a steady decline, losing 3.45% over the past week and a more pronounced 10.24% over the last month. This contrasts sharply with the Sensex, which has only dipped 1.83% and 1.63% respectively over the same periods. Year-to-date, the stock has fallen 3.09%, again underperforming the Sensex’s 1.58% decline. The stock’s recent four-day losing streak has resulted in a cumulative fall of 3.88%, signalling sustained selling pressure.

Intraday trading on 12-Jan saw the stock touch a low of ₹687.05, down 2.89% from the previous close, reflecting bearish sentiment among investors. Notably, the stock is trading below all key moving averages – including the 5-day, 20-day, 50-day, 100-day, and 200-day averages – indicating a weak technical position and a lack of short-term momentum.

Despite this, investor participation has been rising, with delivery volumes on 09 Jan surging by 92.39% compared to the five-day average. This heightened activity suggests that while the stock is falling, it remains liquid and actively traded, with a typical trade size of around ₹0.01 crore based on recent volumes.

Fundamental Strengths Amid Price Weakness

While the stock price has been under pressure, Creative Newtech’s underlying business fundamentals remain robust. The company has demonstrated healthy long-term growth, with net sales expanding at an annual rate of 37.10% and operating profit growing at 35.17%. The most recent quarterly results, reported in September 2025, showed net sales of ₹655.75 crore, a remarkable 59.39% increase year-on-year. Operating profit before depreciation, interest, and taxes (PBDIT) reached a record ₹22.88 crore, with the operating profit margin hitting a high of 3.49%.

These figures highlight the company’s ability to grow revenue and improve profitability despite the current market headwinds. Furthermore, the company’s return on capital employed (ROCE) stands at a healthy 13.4%, and it maintains an attractive valuation with an enterprise value to capital employed ratio of 2.7. This suggests that, from a valuation standpoint, the stock is trading at a discount relative to its peers’ historical averages.

However, the stock’s price performance over the past year has been flat, generating a 0.00% return, even as profits have increased by 10.5%. The price-to-earnings-growth (PEG) ratio of 4.5 indicates that the market may be pricing in slower growth or higher risk, which could be contributing to the recent price softness.

Conclusion: Why the Stock is Falling

The decline in Creative Newtech’s share price on 12-Jan and over recent weeks can be attributed primarily to its underperformance relative to the broader market and sector indices. Despite solid fundamental growth and attractive valuation metrics, the stock has failed to gain upward momentum, trading below all major moving averages and experiencing a sustained selling trend. The flat price return over the past year, combined with a relatively high PEG ratio, suggests that investors may be cautious about the company’s near-term growth prospects or broader market conditions.

In summary, while Creative Newtech Ltd continues to demonstrate strong operational performance and growth potential, its share price is currently weighed down by technical weakness and market sentiment factors. Investors should monitor whether the stock can regain momentum and close the gap with its sector and benchmark indices in the coming months.

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