Why is Manaksia Coated falling/rising?

Short-Term Price Movement and Market Context

Manaksia Coated opened the trading session with a significant gap down of 4.71%, signalling immediate bearish sentiment among investors. The stock also touched an intraday low of ₹132.6, marking a 4.71% drop from the previous close. This underperformance was slightly worse than the sector average, with the stock lagging by 0.4% relative to its peers on the day. The decline contrasts sharply with the broader market, as the Sensex recorded a modest gain of 0.79% over the past week, while Manaksia Coated’s shares fell by 3.06% in the same period.

Investor participation appears to be waning, with delivery volumes on 20 Nov falling by 5.29% compared to the five-day average. This reduced trading activity may have contributed to the stock’s vulnerability to downward price pressure. Despite this, liquidity remains adequate for moderate trade sizes, suggesting that the stock remains accessible to investors but may be experiencing cautious sentiment in the near term.

Long-Term Performance and Financial Strength

Despite the recent price softness, Manaksia Coated’s long-term performance remains robust. The stock has delivered an extraordinary 113.80% return over the past year, vastly outperforming the Sensex’s 10.47% gain. Over three and five years, the stock’s returns have been even more impressive, rising by 671.39% and 2569.61% respectively, compared to the Sensex’s 39.39% and 94.23% gains. This exceptional growth underscores the company’s ability to generate substantial shareholder value over time.

Financially, the company has demonstrated healthy operating profit growth at an annualised rate of 31.94%. The latest quarterly results, declared in September 2025, showed a 2.9% increase in operating profit, with operating cash flow reaching a peak of ₹29.98 crores. The operating profit to interest coverage ratio stands at a strong 3.16 times, indicating solid earnings relative to debt servicing costs. Profit before tax excluding other income surged by 166.8% compared to the previous four-quarter average, reflecting operational efficiency and improved profitability.

Valuation metrics also suggest the stock is attractively priced. With a return on capital employed (ROCE) of 17.5% and an enterprise value to capital employed ratio of 3.7, Manaksia Coated trades at a discount relative to its peers’ historical valuations. The company’s PEG ratio of 0.4 further indicates that its price growth is not overstretched relative to earnings growth, supporting a fair valuation perspective.

Balancing Short-Term Volatility with Long-Term Potential

The current dip in Manaksia Coated’s share price appears to be driven primarily by short-term market dynamics rather than fundamental weaknesses. The stock’s position above its 200-day moving average suggests underlying strength, although it remains below its shorter-term moving averages, indicating some near-term technical resistance. The decline in investor participation and the gap down opening reflect caution among traders, possibly influenced by broader market sentiment or sector-specific factors.

Nevertheless, the company’s consistent track record of delivering strong returns, coupled with its improving profitability and reasonable valuation, supports a constructive long-term outlook. Investors may view the recent price weakness as a potential entry point, given the stock’s history of outperforming benchmarks such as the BSE500 and Sensex over multiple annual periods.

In summary, while Manaksia Coated Metals & Industries Ltd has experienced a notable price decline on 21-Nov, this movement is more reflective of short-term market pressures and technical factors rather than a deterioration in the company’s financial health or growth prospects. The stock’s impressive long-term returns and solid fundamentals continue to underpin its investment appeal.

Get 2 full years of MojoOne Premium for only Rs. 12,999. Subscribe for 1 year and we'll add another year FREE. Offer valid for a limited time. Start Saving Now →