06:30
Unknown
The following concluding comments were made in the previous technical update to the stock chart pattern of 3i Infotech: "Top line is sliding and bottom line is red. Over-leveraging in a bid to grow fast has ruined the balance sheet. Stay away. If you are stuck from higher levels, use any rally to exit."
That update had been posted more than 5 years back. The only thing of note the stock did since then was rise from a low of 6 (touched on May 7 '14) to a high of 13.60 (on Jun 13 '14) - a quick gain of 125% in 5 weeks that gave stuck investors an opportunity to exit.
In less than 2 months, the stock slid down below 10 and dropped all the way to a lifetime low of 2.20 on May 25 '15. Investors got a roller-coaster ride, as the stock rose to 6.80 on Jun 25 '15, and then dropped to 2.70 on Aug 20 '15.
The stock price closed in the range between 2.70 and 6.80 during the next 28 months before suddenly breaking out in Dec '17. What was the trigger? There were two. First, CRISIL upgraded the company's credit rating from 'D' to 'BB' (stable).
Then came news of the company pre-paying three instalments of its debt (worth Rs 195 Million) which were due in Oct '18, Nov '18 and Dec '18. How did a loss-making company pre-pay its debt?
The reason may be found in the cash flow statement. 3i Infotech has generated positive cash flows from operations in 4 of the past 5 years. Bulls must have felt encouraged by the positive news.
The stock has shot up to test its previous closing high of 9.10 touched three years back. Daily technical indicators are inside their overbought zones. The stock can consolidate or correct a bit before trying to move higher.
Q3 (Dec '17) results will be announced on Jan 30 '18. Consider entry if there are definite signs of a turnaround in business. (Turnaround stories can generate good profits. Note that the equity capital is bloated, so don't expect a rise from 10 to 100 in 6 months.)
That update had been posted more than 5 years back. The only thing of note the stock did since then was rise from a low of 6 (touched on May 7 '14) to a high of 13.60 (on Jun 13 '14) - a quick gain of 125% in 5 weeks that gave stuck investors an opportunity to exit.
In less than 2 months, the stock slid down below 10 and dropped all the way to a lifetime low of 2.20 on May 25 '15. Investors got a roller-coaster ride, as the stock rose to 6.80 on Jun 25 '15, and then dropped to 2.70 on Aug 20 '15.
The stock price closed in the range between 2.70 and 6.80 during the next 28 months before suddenly breaking out in Dec '17. What was the trigger? There were two. First, CRISIL upgraded the company's credit rating from 'D' to 'BB' (stable).
Then came news of the company pre-paying three instalments of its debt (worth Rs 195 Million) which were due in Oct '18, Nov '18 and Dec '18. How did a loss-making company pre-pay its debt?
The reason may be found in the cash flow statement. 3i Infotech has generated positive cash flows from operations in 4 of the past 5 years. Bulls must have felt encouraged by the positive news.
The stock has shot up to test its previous closing high of 9.10 touched three years back. Daily technical indicators are inside their overbought zones. The stock can consolidate or correct a bit before trying to move higher.
Q3 (Dec '17) results will be announced on Jan 30 '18. Consider entry if there are definite signs of a turnaround in business. (Turnaround stories can generate good profits. Note that the equity capital is bloated, so don't expect a rise from 10 to 100 in 6 months.)
Posted in: Indian Market
1 comments:
Nice informatiom. Thanks for sharing. You may also check latest updates on Stocks like
SBI MF IPO
Mazagon Dock
Tencent Holdings Ltd
Brookfield IPO
Post a Comment