Why is Nila Infrastruct falling/rising?

Jul 03 2025 09:19 PM IST
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As of 03-Jul, Nila Infrastructures Ltd's stock price is 12.44, down 1.11%. Despite strong financials and a positive month, the stock faces long-term challenges with declining operating profits and a weak EBIT to interest ratio.
As of 03-Jul, Nila Infrastructures Ltd's stock price is currently at 12.44, reflecting a decrease of 0.14, or 1.11%. The stock has underperformed its sector by 0.76% today and has experienced a trend reversal, falling after two consecutive days of gains. Despite being above the 20-day, 50-day, 100-day, and 200-day moving averages, it is below the 5-day moving average. The delivery volume has also decreased by 19.02% compared to the 5-day average, indicating falling investor participation. Over the past month, the stock has shown a positive return of 10.48%, although it has a year-to-date decline of 0.72%. The company has reported strong financials, including a 38.29% growth in net profit and positive results for the last nine consecutive quarters, which could support its valuation despite the current price drop.

In the broader market context, Nila Infrastructures' short-term performance of -0.08% over the past week is better than the benchmark Sensex, which has declined by 0.62% in the same period. However, the stock's long-term fundamentals show a concerning -4.98% CAGR growth in operating profits over the last five years, coupled with a weak EBIT to interest ratio of 1.54, indicating challenges in servicing debt. While the company has a relatively attractive valuation with a low PEG ratio of 0.3 and a return on equity of 12.5%, the overall weak long-term fundamental strength may be contributing to the stock's recent decline despite its positive short-term performance.
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