Coffee Day shares zoomed 44% in two days; is more steam left?

Coffee Day Enterprises Ltd shares continued to climb for the second consecutive session on Tuesday after the National Company Law Appellate Tribunal (NCLAT) overturned insolvency proceedings against the company. The stock surged 20 per cent to settle at Rs 30.78. At this price, it has gained 43.96 per cent in just two trading days.

Bringing in a huge relief for the operator of the Cafe Coffee Day chain, the insolvency case, filed by IDBI Trusteeship Services over an alleged Rs 228 crore default, was set aside by a two-member bench of NCLAT's Chennai panel. The Chennai bench of NCLAT overturned the National Company Law Tribunal's (NCLT's) August 2024 order, which admitted an insolvency plea filed by IDBI Trusteeship Services.

For the near term, few analysts suggested that Coffee Day's counter looked strong on daily charts. Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said immediate resistance would be at Rs 32 level in the near term while support could be seen at Rs 28.

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi, also suggested the same support and resistance levels adding that a decisive move above Rs 32 may trigger a further upside towards Rs 35. "The expected trading range will be between Rs 28 and Rs 35 for the short term," Pated stated.

Sebi-registered research analyst AR Ramachandran said, "Coffee Day stock price is bullish on daily charts with strong support at Rs 26.5. A daily close above the resistance of Rs 31.5 could lead to a further upside target of Rs 36 in the near term."

The counter traded higher than the 5-day, 10-, 20-day and 30-day simple moving averages (SMAs) but lower than the 50-day, 100-, 150-day and 200-day SMAs. Its 14-day relative strength index (RSI) came at 56.84. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a negative price-to-equity (P/E) ratio of 0.55 against a price-to-book (P/B) value of 0.35. Earnings per share (EPS) stood at (-)55.69 with a return on equity (RoE) of (-)63.13.

As of December 2024, promoters held an 8.21 per cent stake in the company.