Strong Price Momentum and Market Outperformance
The stock's upward trajectory on 17-Feb is underscored by its impressive gains over multiple time horizons. Over the past week, Mangalam Cement has appreciated by 11.56%, sharply contrasting with the Sensex's decline of 0.98% during the same period. This trend extends to the one-month and year-to-date frames, where the stock has delivered returns of 18.58% and 15.52% respectively, while the Sensex remained largely flat or negative. Such consistent outperformance highlights the stock's resilience and appeal amid broader market volatility.
Further emphasising its strength, Mangalam Cement is trading just 1.5% below its 52-week high of ₹903.4, signalling proximity to peak valuations within the past year. The stock also outpaced its sector by 8.88% on the day, reinforcing its relative strength within the cement industry.
Technical Indicators and Investor Participation
Technical factors have also played a pivotal role in the stock's rise. Mangalam Cement is trading above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, indicating a strong bullish trend. The stock's intraday high reached ₹897.55, nearly 10% above the previous close, reflecting heightened buying interest.
Investor participation has notably increased, with delivery volumes on 16 Feb surging by 224.86% to 1.8 lakh shares compared to the five-day average. This spike in delivery volume suggests that investors are not only trading the stock actively but also holding shares, signalling confidence in the stock's medium-term prospects. Despite a wide trading range of ₹83.6 on the day, the weighted average price indicates that more volume was traded closer to the lower end of the range, which may imply some profit booking but overall sustained demand.
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Fundamental Strength and Valuation Appeal
Beyond technicals, Mangalam Cement's fundamental metrics provide a compelling backdrop for its price appreciation. The company boasts a return on capital employed (ROCE) of 9.5%, which is considered attractive within the cement sector. Its enterprise value to capital employed ratio stands at a modest 2.1, indicating a favourable valuation relative to the capital invested in the business.
Importantly, the stock is trading at a discount compared to its peers' historical valuations, offering investors value alongside growth. Over the past year, Mangalam Cement has delivered a total return of 19.38%, while its profits have surged by an impressive 79.1%. This strong earnings growth is reflected in a low PEG ratio of 0.4, suggesting that the stock remains undervalued relative to its growth prospects.
The majority of the company's shares are held by non-institutional investors, which may contribute to more stable ownership and potentially less volatility from large institutional trading.
Long-Term Market-Beating Performance
Mangalam Cement's recent gains are part of a broader trend of sustained outperformance. Over the last three years, the stock has appreciated by 221.09%, vastly outperforming the Sensex's 36.80% gain. Even over a five-year horizon, the stock's return of 233.16% dwarfs the benchmark's 61.40%. This consistent market-beating performance underscores the company's strong operational execution and investor confidence.
Such long-term strength, combined with recent positive momentum, positions Mangalam Cement as a noteworthy contender within the cement sector, attracting both short-term traders and long-term investors.
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Conclusion
The rise in Mangalam Cement Ltd's share price on 17-Feb is supported by a confluence of factors including strong relative performance against the Sensex and sector peers, positive technical indicators, increased investor participation, and robust fundamental metrics. Its attractive valuation, significant profit growth, and consistent long-term outperformance have combined to fuel investor enthusiasm, driving the stock close to its 52-week high. While some volume was traded near the lower price range during the day, the overall trend remains bullish, suggesting sustained confidence in the company's prospects.
Investors looking for exposure to a cement sector stock with a proven track record of growth and value may find Mangalam Cement an appealing option, though monitoring market conditions and valuation levels remains prudent.
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