COLPAL - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:01 am

Swing Trade Rating: 3.8

📊 COLPAL shows moderate potential for swing trading. The stock is trading below both its 50 DMA (2,189 ₹) and 200 DMA (2,368 ₹), reflecting short-term weakness. RSI at 34.8 indicates oversold conditions, while MACD (-19.7) confirms bearish sentiment. Fundamentally, the company is strong with exceptional ROCE (105%) and ROE (81.2%), supported by a healthy dividend yield (2.42%). However, valuations are stretched with a P/E of 43.2 compared to industry PE of 49.7, and recent profit decline adds caution.

💡 Optimal Entry Price: Around 2,080–2,100 ₹ (near support zone close to 2,064 ₹).

🚪 Exit Strategy: If already holding, consider exiting near 2,180–2,200 ₹ (resistance at 50 DMA) or trail stop-loss below 2,050 ₹ to manage risk.

✅ Positive

• 📈 Exceptional ROCE (105%) and ROE (81.2%) highlight strong capital efficiency.
• 💰 Dividend yield of 2.42% provides steady income support.
• 📊 DII holding increased (+2.61%), showing strong domestic institutional confidence.

⚠️ Limitation

• 📉 Trading below 50 DMA and 200 DMA shows weak technical momentum.
• 📊 High PEG ratio (4.31) suggests poor growth relative to valuation.
• 📉 Book value (58.2 ₹) is significantly lower than current price, indicating stretched valuation on assets.

🚨 Company Negative News

• 📉 Quarterly profit variation (-17.1%) shows earnings decline.
• 📉 FII holding reduced (-3.23%), reflecting foreign investor caution.
• 📉 52-week return only 5.38%, showing limited performance compared to peers.

🌟 Company Positive News

• 📈 PAT improved slightly from 321 Cr. to 328 Cr. in the latest quarter.
• 💡 EPS at 48.8 ₹ supports earnings visibility.

🏭 Industry

• 📊 Industry PE at 49.7, higher than COLPAL’s PE (43.2), suggesting relative undervaluation.
• 📈 FMCG sector demand remains strong, supported by consumer staples and brand loyalty.

📌 Conclusion

COLPAL is a moderately attractive swing trade candidate with strong fundamentals but weak technicals. Entry near 2,080–2,100 ₹ offers a cautious setup, while exits should be targeted around 2,180–2,200 ₹. Caution is advised due to declining profits, reduced FII interest, and bearish indicators, but strong ROCE/ROE and sector resilience provide support for short-term trades.

I can also prepare a comparison of COLPAL with another FMCG stock to highlight relative swing trade strength.