CCL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | CCL | Market Cap | 13,375 Cr. | Current Price | 1,002 ₹ | High / Low | 1,074 ₹ |
| Stock P/E | 73.0 | Book Value | 94.7 ₹ | Dividend Yield | 0.50 % | ROCE | 10.1 % |
| ROE | 8.02 % | Face Value | 2.00 ₹ | DMA 50 | 955 ₹ | DMA 200 | 880 ₹ |
| Chg in FII Hold | 0.49 % | Chg in DII Hold | -0.30 % | PAT Qtr | 112 Cr. | PAT Prev Qtr | 31.4 Cr. |
| RSI | 61.4 | MACD | 6.18 | Volume | 3,37,746 | Avg Vol 1Wk | 2,11,683 |
| Low price | 475 ₹ | High price | 1,074 ₹ | PEG Ratio | -7.20 | Debt to equity | 0.69 |
| 52w Index | 87.9 % | Qtr Profit Var | 306 % | EPS | 13.7 ₹ | Industry PE | 13.9 |
🔍 Analysis: CCL Products shows strong quarterly profit growth (306% variation, PAT 112 Cr vs 31.4 Cr) and EPS of 13.7 ₹, but efficiency metrics remain weak with ROE at 8.02% and ROCE at 10.1%. The stock trades at a very high P/E of 73 compared to the industry average of 13.9, indicating severe overvaluation. Dividend yield is modest at 0.50%, and debt-to-equity at 0.69 adds leverage risk. PEG ratio (-7.20) signals unsustainable valuation relative to growth. Current price (1,002 ₹) is above DMA supports (50 DMA at 955 ₹, 200 DMA at 880 ₹), showing near-term strength but limited upside compared to its 52-week high (1,074 ₹).
💡 Entry Zone: Ideal entry would be in the 850–900 ₹ range, aligning with DMA supports and offering margin of safety. Deeper accumulation possible near 750–800 ₹ for long-term investors.
📈 Exit / Holding Strategy: If already holding, consider tactical holding for 12–18 months, but exit near 1,050–1,070 ₹ resistance if valuations stretch without efficiency improvement. Long-term holding is not advisable unless ROE/ROCE improve significantly and valuations normalize.
🌟 Positive
- Quarterly PAT surged (112 Cr vs 31.4 Cr)
- EPS at 13.7 ₹ supports earnings visibility
- FII holdings increased (+0.49%)
- Stock trading above DMA supports, showing near-term strength
⚠️ Limitation
- High P/E (73 vs industry 13.9)
- Weak ROE (8.02%) and ROCE (10.1%)
- PEG ratio (-7.20) signals unsustainable valuation
- Dividend yield modest (0.50%)
📉 Company Negative News
- Operational inefficiency reflected in low ROE/ROCE
- DII holdings reduced (-0.30%)
📈 Company Positive News
- Strong quarterly profit growth (306% variation)
- FII stake increased, showing foreign confidence
🏭 Industry
- Industry PE at 13.9, far lower than CCL’s valuation
- Food & beverage sector benefits from global demand but faces margin pressures
✅ Conclusion
CCL Products is currently a weak candidate for long-term investment due to high P/E, poor efficiency metrics, and negative PEG ratio. Ideal entry is near 850–900 ₹ for margin of safety. Existing holders should consider tactical holding but exit near 1,050–1,070 ₹ unless fundamentals improve significantly.