Why is Deco-Mica falling/rising?

Aug 21 2025 09:33 PM IST
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As of 21-Aug, Deco-Mica Ltd's stock price is at 75.95, down 1.33%, and has shown a trend reversal after three days of gains. Despite a recent positive return of 7.73%, the stock has weak long-term fundamentals, including declining profits and high debt levels, contributing to its current downward movement.
As of 21-Aug, Deco-Mica Ltd's stock price is currently at 75.95, reflecting a decrease of 1.02, or 1.33%. The stock has underperformed its sector by 1.44% today and has experienced a trend reversal, falling after three consecutive days of gains. The stock has traded within a narrow range of Rs 0.05, and there has been a notable decline in investor participation, with delivery volume dropping by 20.74% compared to the five-day average. Over the past week, the stock has shown a positive return of 7.73%, but it has underperformed over the longer term, with a year-to-date return of -6.23% and a one-year return of -7.38%. While the stock has a very attractive valuation with a return on capital employed (ROCE) of 11.4 and is trading at a discount to its peers, its profits have fallen by 0.9% over the past year, indicating underlying weakness.

In the broader market context, the Sensex has increased by 1.74% over the past week, contrasting with Deco-Mica's positive return during the same period. The stock's long-term fundamentals appear weak, evidenced by a high debt-to-EBITDA ratio of 3.61 times and a low average return on equity of 8.04%, which suggests limited profitability. Additionally, the company's flat results in June, characterized by the lowest net sales and debtors turnover ratio, further contribute to the negative sentiment surrounding the stock. Overall, while Deco-Mica has shown some short-term gains, the combination of declining profits, high debt levels, and weak long-term fundamentals has led to its current downward price movement.
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