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Mangalam Cement Reaches All-Time High: Soars 210% in 9+ Months!

Mangalam Cement Reaches All-Time High: Soars 210% in 9+ Months!
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Chart: Mangalam Cement All Time High & 52 Week Low as of 29 Dec 2023

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Mangalam Cement hit its 52 week low of ₹234.10 on 28 Mar 2023 and from there it move to ₹737.15 creating a brand-new All Time High on 28 Dec 2023, giving a whopping 210.81% return in just 9 months and 1 days.

If you had invested ₹10,000 at its 52-week low price, your investment would have grown to ₹31,081 by 29 Dec 2023. This represents a gain of ₹21,081 in just 9 months and 1 days. Given MANGLMCEM's strong recent performance, Lets find out what opportunities lies ahead for MANGLMCEM

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Mangalam Cement’s Record Surge to a New All-Time High

The all-time high of Mangalam Cement can be a result of many factors. Its previous all-time high was made on 22 December 2023 at ₹ 721.5. It took 06 days to create a new all-time high at ₹ 737.15 on 28 December 2023. In between, it made a low of ₹ 680.2 on 26 December 2023, implying a correction of over 5%. It may represent a change in the investors’ sentiment about the company due to improved financial condition or may represent overvaluation. Let’s go through the factors contributing to its all-time high.

Factors Contributing to a Stock’s All-Time High

Positive Earnings Reports

  • In Q2 FY24, the revenue of the company increased by 7.26% year-on-year and reached ₹ 428 crores.
  • The gross profit of Mangalam Cement increased by 51.83% year-on-year due to higher revenue and lower cost of goods sold. It earned a gross profit of ₹ 178 crores.
  • In the last 3 years, it has maintained a steady dividend per share of ₹ 1.50.
  • The Indian government has set an ambitious goal of making India a $ 5 trillion economy by 2030. To increase the country’s GDP, India needs substantial investment in infrastructure projects, most of which use cement as a raw material. Mangalam Cement can see an increased revenue due to the increase in spending on infrastructure projects.
  • Cement production is a capital-intensive business, and even a small efficiency increase in cement production can result in a significant increase in the profit of companies. To optimize the production process, companies need to adopt automation, AI, data analytics, etc. Mangalam Cement can use the latest technological advancements to reduce the cost of production.
  • Cement, being a raw material with demand almost all over India, can benefit from the regional factors and lack of competition in certain regions. Mangalam Cement can benefit by operating in a region that has high localized demand, thus reducing the cost of products for the end users.

Positive Analyst Ratings

According to Simply Wall Street, based on the discounted cash flow model, the fair value of Mangalam Cement’s share is ₹ 1562.61. However, its CMP is ₹ 727.60, which means the stock is 525.5% undervalued. It has a price-to-earnings ratio of 46.8x, which is higher than the peer average of 31.5x, thus making it overvalued. The company has become profitable over the last 5 years, with 30.9% earnings growth over the past year. Its current net profit margin of 2.5% is higher than the previous year’s value of 1.9%. Its earnings are expected to grow at 79.19% per year, which will be faster than the 16.4% per year growth of the Indian market.

Potential Scenarios Following an All-Time High

(Based on the chart of 1-month timeframe)

Converting numbers and candles into information can provide us with the market’s stance on the stock, which may help us make correct investment decisions. Since the listing of Mangalam Cement in January 2003, it has made only 18 all-time highs after a gap of at least a month. In August 2023, it started its bull rally with higher highs and higher lows every month. We can expect the trends to continue so the investors may enter the stock at the price of their liking but keep the stop loss at the low made in the previous month.

Mangalam Cement Stock Analysis: Potential Supports and Targets

Thu 28 Dec 2023 - In a remarkable market development, Mangalam Cement has soared to ₹737.15, setting a brand-new All Time High record! With this surge, there are chances of it becoming volatile, as many investors may like to book their profits by exiting or closing their positions. At this time potential investors and current stakeholders should keep an eye for opportunities for entry or exit.

Below you will find Mangalam Cement's metrics highlight, potential support and targets derived using Fibonacci Retracement and Extensions method, where Golden Ratio is assumed to be a good support (entry point) and Golden Extension to be good resistance (target point)

KEY PERFORMANCE METRICS

MetricsValueOccured On
Close Price₹727.60Fri, 29 Dec 2023
52 Week High₹737.15Thu, 28 Dec 2023
52 Week Low₹234.10Tue, 28 Mar 2023
All Time High₹737.15Thu 28 Dec 2023

The above table shows that the close price of Mangalam Cement on Fri, 29 Dec 2023 was ₹727.60. Notably, the All-Time High is same as the 52-Week High, indicating that the all-time high was achieved recently and it cloud be a strong resistance level which would need great upward momentum to break.

It's possible that some investors might consider booking profits near the 737.15 mark, which could apply downward pressure on the stock price. But what does this newly created milestone signify for potential investors? Lets find out.

Mangalam Cement Fibonacci Retracement Or Support levels

For those considering an entry, the Golden Ratio (61.8%) retracement level of ₹426 offers a promising point, given the likelihood of a pullback from these levels as new investors might come in at these levels.

Retracement or Support LevelsValues
S123.6%₹618
S238.2%₹544
S350.0%₹485
S461.8% (Golden Ratio)₹426
S578.6%₹341
S652 Week Low₹234

Note: This table was last updated on Fri, 29 Dec 2023.

Mangalam Cement Fibonacci Extensions Or Target levels

For those considering an exit, the Golden Extension (161.8%) level of ₹1048 offers a promising point, given the likelihood of a downward momentum from these levels as investors might start booking their profits at these levels.

Extensions or Target LevelsValues
T152 Week High₹737
T2138.2%₹929
T3161.8% (Golden Extension)₹1048
T4200%₹1240
T5261.8%₹1551

Note: This table was last updated on Fri, 29 Dec 2023.

Making Informed Investment Decisions

For any stock, reaching an all-time high is a significant milestone. Still, conducting thorough research and considering various factors is essential before making investment decisions. To make informed choices that align with your investment goals and risk tolerance, one needs to analyze the company’s fundamentals, industry trends, management’s strategy, and overall market conditions.

Company’s Financial Health

  • In 2022, Mangalam Cement had a debt of ₹ 621 crores with a negative free cash flow of ₹ 51.11 crores and cash & equivalents of ₹ 50.90 crores. It shows a massive difference between the debt and funds, which makes it essential for the company to increase the amount under free cash flow or cash & equivalents.
  • In the short term, it has a liability of ₹ 779 crores covered by assets of ₹ 669 crores. The assets of ₹ 1474 crores cover its long-term liabilities of ₹ 594 crores. The company may need to sell its long-term assets to increase the coverage of short-term liabilities.

Industry Outlook

  • The European Union has already placed a carbon tax on the cement imported from outside its region and thus made the imports expensive. A similar push can be seen from many other countries as they try to keep their carbon emission under the target. The industry may see a shift towards producing products according to international standards to reduce taxes and keep its products attractive compared to the local products.
  • Due to globalization, the issue of one country quickly spirals to affect the economies worldwide. It results in volatile raw material prices, sudden changes in import-export policies, etc. Companies need to maintain their supply chain effectively for uninterrupted supply and be ready to face any challenges.

Market Sentiment

Due to a confluence of many factors the Mangalam Cement surged to a new all-time high of ₹ 737.15. The jump due to significant gains over a few months is driven by improved financial health, including increase in revenue and gross profits. Analyst rating of undervaluation based on growth projection can also influence investors. The company needs to adopt the latest technology in line with the requirement for international trade to keep its products relevant in future. The various factors listed have created a landscape of both opportunity and challenges. Investors need to conduct detailed research, considering factors like company fundamentals, industry trends, and financial health, to make informed investment decisions.

Disclaimer: Information is provided ‘as is’ and solely for informational and educational purposes, not for trading purposes or advice. We highly recommend to do your own research before making any investment.

About The Author

Nippun

Hi, I’m Nippun, a tech enthusiast from Haryana, India. I have been coding since 2010 and using my coding skills in the share market since 2020. I have been coding scripts in Pinescript that work on Tradingview app/web. I love learning about new technology and applying it to solve real-world problems. Coding and share-market are my passions, and I enjoy finding and fixing bugs in code. I aim to share my skill set and experience that can positively impact society. Feel free to connect with me, and let’s learn from each other. My Twitter