COHANCE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.2
| Stock Code | COHANCE | Market Cap | 14,024 Cr. | Current Price | 367 ₹ | High / Low | 1,328 ₹ |
| Stock P/E | 37.8 | Book Value | 115 ₹ | Dividend Yield | 0.00 % | ROCE | 16.0 % |
| ROE | 12.5 % | Face Value | 1.00 ₹ | DMA 50 | 495 ₹ | DMA 200 | 757 ₹ |
| Chg in FII Hold | -0.50 % | Chg in DII Hold | 0.76 % | PAT Qtr | 94.3 Cr. | PAT Prev Qtr | 58.6 Cr. |
| RSI | 19.9 | MACD | -39.3 | Volume | 4,41,452 | Avg Vol 1Wk | 3,32,579 |
| Low price | 356 ₹ | High price | 1,328 ₹ | PEG Ratio | -1.83 | Debt to equity | 0.05 |
| 52w Index | 1.17 % | Qtr Profit Var | -32.2 % | EPS | 12.0 ₹ | Industry PE | 29.1 |
📊 Analysis: COHANCE trades at a P/E of 37.8, higher than the industry average of 29.1, indicating premium valuation. ROE (12.5%) and ROCE (16.0%) are moderate, reflecting average efficiency. EPS of 12 ₹ supports profitability, but PEG ratio (-1.83) highlights distorted valuation relative to growth. Dividend yield is 0.00%, offering no income support. Debt-to-equity at 0.05 shows a healthy balance sheet. Technicals show price well below DMA 50 (495 ₹) and DMA 200 (757 ₹), with RSI at 19.9 indicating oversold conditions and MACD (-39.3) signaling bearish momentum. Quarterly PAT declined (-32.2%), raising caution despite sequential improvement (94.3 Cr. vs 58.6 Cr.). Institutional activity is mixed, with FII holdings reduced (-0.50%) and DII holdings increased (+0.76%).
💰 Ideal Entry Zone: Between 355 ₹ – 370 ₹ (near support levels and oversold RSI zone). Current price (367 ₹) is within fair entry range, so staggered accumulation is possible for risk-tolerant investors.
📈 Exit / Holding Strategy: For long-term investors already holding, maintain positions cautiously given moderate ROE/ROCE and sector potential. Exit if price sustains below 356 ₹ (recent low) or if earnings continue to weaken. Holding period: 2–3 years, with periodic review of profitability and valuation multiples.
Positive
- ROE (12.5%) and ROCE (16.0%) show moderate efficiency
- EPS of 12 ₹ supports profitability
- Debt-to-equity ratio of 0.05 indicates strong balance sheet
- RSI at 19.9 suggests oversold conditions, potential rebound
- DII holdings increased (+0.76%), showing domestic confidence
Limitation
- P/E of 37.8 is higher than industry average (29.1)
- PEG ratio (-1.83) indicates distorted valuation
- No dividend yield (0.00%)
- Price below DMA 50 and DMA 200 reflects weak technical trend
- Quarterly PAT declined (-32.2%)
Company Negative News
- Quarterly PAT dropped significantly (-32.2%)
- FII holdings reduced (-0.50%), showing foreign caution
Company Positive News
- Sequential PAT improved (94.3 Cr. vs 58.6 Cr.)
- DII holdings increased (+0.76%), reflecting domestic support
Industry
- Industry P/E at 29.1 shows COHANCE trades at a premium
- Specialty chemicals sector supported by global demand but cyclical in nature
Conclusion
⚖️ COHANCE is a moderately efficient company with a strong balance sheet but currently trades at premium valuations and faces earnings pressure. Ideal entry is near 355–370 ₹. Long-term holders should maintain positions for 2–3 years, monitoring profitability, sector demand, and valuation multiples.