Why is Dharan Infra-EPC Ltd falling/rising?

Recent Price Movement and Short-Term Performance

The stock has underperformed notably in the short term despite a modest weekly gain of 4.55%, which contrasts with the Sensex’s decline of 2.55% over the same period. However, this weekly improvement masks a more concerning monthly and year-to-date performance. Over the past month, Dharan Infra-EPC has plummeted by 32.35%, significantly worse than the Sensex’s marginal 1.29% decline. Year-to-date, the stock has fallen 4.17%, underperforming the benchmark’s 1.93% drop. This indicates that while there may have been brief rallies, the overall sentiment remains negative.

Long-Term Downtrend Evident in Returns

Examining longer horizons reveals a stark picture for investors. Over one year, the stock has lost 71.43% of its value, in sharp contrast to the Sensex’s 7.67% gain. The three-year and five-year returns further highlight the stock’s persistent struggles, with losses of 84.19% and 92.52% respectively, while the Sensex has delivered robust gains of 37.58% and 71.32% over the same periods. Such sustained underperformance suggests structural or company-specific issues that have weighed heavily on investor confidence.

Technical Indicators and Market Sentiment

On 09-Jan, Dharan Infra-EPC’s share price fell by 4.17%, continuing a two-day losing streak that has resulted in an 8% decline over this short period. The stock is trading below all key moving averages—5-day, 20-day, 50-day, 100-day, and 200-day—signalling a bearish technical outlook. This persistent weakness in price levels often deters short-term traders and can exacerbate selling pressure.

Sectoral Influence and Investor Participation

The construction and real estate sector, to which Dharan Infra-EPC belongs, has also been under pressure, declining by 2.39% on the same day. This sectoral downturn likely compounds the stock’s challenges, as investors may be cautious about exposure to real estate amid broader economic or industry-specific headwinds. Additionally, investor participation appears to be waning, with delivery volumes on 08 Jan falling by nearly 25% compared to the five-day average. Reduced trading volumes can indicate diminished interest or uncertainty among shareholders, which often leads to increased volatility and price declines.

Liquidity and Trading Considerations

Despite the negative price action, Dharan Infra-EPC remains sufficiently liquid for modest trade sizes, with liquidity supporting transactions up to approximately ₹0.03 crore based on 2% of the five-day average traded value. While this liquidity level allows for trading activity, it may not be adequate to absorb large orders without impacting the price, potentially contributing to sharper price movements during periods of selling pressure.

Conclusion: Why Dharan Infra-EPC Is Falling

The decline in Dharan Infra-EPC Ltd’s share price on 09-Jan is the result of a combination of factors. The stock’s prolonged underperformance relative to the Sensex across multiple time frames highlights deep-rooted challenges. Its current technical positioning below all major moving averages signals continued bearish momentum. The broader construction and real estate sector’s weakness further weighs on the stock, while falling investor participation suggests waning confidence. Although the stock remains liquid enough for small trades, this has not been sufficient to prevent the recent price declines. Investors should carefully consider these factors when analysing Dharan Infra-EPC’s prospects and weigh alternative opportunities within the sector or broader market.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →