Why is Deco-Mica falling/rising?

Aug 26 2025 09:27 PM IST
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As of 26-Aug, Deco-Mica Ltd's stock price is 74.95, showing a slight decrease and erratic trading patterns. Despite an attractive valuation, the company faces challenges such as high debt and low profitability, leading to cautious investor sentiment and a poor year-to-date performance compared to the market.
As of 26-Aug, Deco-Mica Ltd's stock price is currently at 74.95, reflecting a slight decrease of 0.05, or 0.07%. The stock has experienced erratic trading, not trading on one day out of the last 20 days, and its delivery volume has fallen significantly by 26.96% against the 5-day average. Despite being higher than the 100-day and 200-day moving averages, it is trading lower than the 5-day, 20-day, and 50-day moving averages. Over the past year, the stock has generated a return of -12.13%, while its profits have decreased by 0.9%. Although it has a very attractive valuation with a return on capital employed (ROCE) of 11.4 and is trading at a discount compared to its peers, the company faces challenges such as a high debt to EBITDA ratio of 3.61 times and low profitability per unit of shareholders' funds, which contribute to its recent price movement.

In the broader market context, Deco-Mica's short-term performance over the past week shows a return of +0.74%, which contrasts with the Sensex's decline of 1.05%. This indicates that while the stock is performing slightly better than the benchmark in the short term, its year-to-date performance is significantly worse, with a decline of 7.47% compared to the Sensex's gain of 3.39%. The overall weak long-term fundamental strength, highlighted by a low ability to service debt and flat results in recent quarters, suggests that investor sentiment may be cautious, impacting the stock's price negatively despite its attractive valuation metrics.
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