Why is Last Mile Enter. falling/rising?

Persistent Underperformance Against Benchmarks

Last Mile Enterprises has been grappling with a challenging market environment, as evidenced by its stark underperformance relative to the Sensex. Over the past week, the stock has declined by 5.87%, while the Sensex managed a modest gain of 0.13%. This negative momentum has intensified over longer periods, with the stock plunging 24.40% in the last month compared to a 0.77% rise in the benchmark index.

Year-to-date figures paint an even more concerning picture, with the stock down 70.90% against the Sensex’s 9.05% gain. Over the last twelve months, Last Mile Enterprises has lost 75.83% of its value, whereas the Sensex has appreciated by 3.75%. Although the company’s five-year returns remain impressive at 312.24%, significantly outpacing the Sensex’s 84.19%, the recent trend signals a sharp reversal in investor sentiment.

Technical Indicators and Price Movements

On 15-Dec, the stock hit a new 52-week low of ₹9.80, underscoring the persistent selling pressure. The share price has been declining consecutively for three days, resulting in a cumulative loss of 5.43% during this period. This short-term weakness is further highlighted by the stock trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages. Such positioning typically signals bearish sentiment among traders and technical analysts alike.

Despite the falling price, investor participation has shown signs of rising interest. On 12 Dec, delivery volume surged to 5.19 lakh shares, marking a 385.26% increase compared to the five-day average delivery volume. This spike in volume suggests that while the stock is under pressure, there remains active trading interest, possibly from investors repositioning or exiting their holdings amid the downtrend.

Liquidity and Trading Considerations

Liquidity metrics indicate that Last Mile Enterprises is sufficiently liquid for trading, with the stock able to accommodate trade sizes of up to ₹0 crore based on 2% of the five-day average traded value. This level of liquidity ensures that investors can enter or exit positions without significant price impact, although the prevailing negative momentum may deter new buyers.

Summary and Investor Implications

The decline in Last Mile Enterprises’ share price on 15-Dec is a reflection of sustained negative performance across multiple time horizons, compounded by technical weakness and recent new lows. The stock’s underperformance relative to the Sensex and sector benchmarks highlights challenges that have weighed heavily on investor confidence. While increased delivery volumes indicate active trading interest, the prevailing trend remains bearish as the stock trades below all major moving averages.

Investors should carefully consider these factors in the context of their portfolio strategies. The stock’s historical five-year outperformance suggests long-term potential, but the current environment calls for caution given the sharp recent declines and technical signals. Monitoring liquidity and volume trends will be crucial for those contemplating entry or exit points in this microcap.

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 →