Shares of FMCG company Elitecon International Limited are in focus after the company received approval from its shareholders to increase its financial limits. The decision allows the company to borrow much more money in the future, which has caught the attention of investors and market watchers.
Even though the stock has given very strong returns over the past year, its price has recently come under pressure due to market weakness and profit booking. The stock also remains under special monitoring by the stock exchange.
Elitecon International Limited informed the stock exchanges that its shareholders have approved a major increase in the company’s borrowing capacity. Under this approval, the company can now raise loans and other borrowings up to Rs 500 crore. This permission has been granted under the Companies Act, which allows companies to expand their financial flexibility after shareholder consent.
This move is seen as an important step for the company, as it may help fund future expansion plans, investments, or working capital needs. However, despite this positive development, the stock did not perform well during the latest trading session.
On Thursday, the stock opened slightly lower at Rs 65 compared to its previous closing price of Rs 65.19. During the day, it moved between a high of Rs 65.18 and a low of Rs 61.94. At the last count, the stock was trading at Rs 61.94, down nearly 5 per cent for the day. The company’s market value stood at around Rs 9,900 crore.
The stock has been falling for the past three trading sessions and has lost over 14 per cent during this period. This decline shows that investors are currently cautious, even though the company has taken steps to strengthen its financial position.
From a technical point of view, the stock is trading below all its key moving averages, including short-term and long-term levels. This generally indicates weakness in price movement and suggests that the stock is under selling pressure.
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Adding to the caution, the Bombay Stock Exchange has placed Elitecon’s stock under the Short Term Additional Surveillance Measure Stage 3. Stocks under this framework face closer monitoring due to high volatility or unusual price movements. This move is meant to protect investors and maintain market stability.
The stock’s relative strength index, or RSI, stands at 25.62. This number suggests that the stock is in the oversold zone. An RSI below 30 usually means that a stock may be undervalued in the short term, but it can also reflect strong selling pressure.
Despite the recent fall, Elitecon International Limited has delivered outstanding returns in the past. Over the last one year, the stock has gained nearly 320 per cent. Over a three-year period, the return is even more striking, rising by almost 5,800 per cent. These numbers explain why the stock has remained on investors’ radar.
However, the stock has also seen a sharp correction in recent months. On a year-to-date basis, it has fallen by nearly 40 per cent. This is much worse than the broader market, which has seen only a small decline during the same period.
Such corrections are not uncommon in stocks that have risen very fast in a short time. Investors often book profits, especially when market conditions turn uncertain or when valuations appear stretched.
The broader market mood has also been cautious. On Thursday morning, benchmark indices like the Sensex and Nifty were trading lower after two days of gains. Investors turned careful ahead of the upcoming Union Budget, which is expected to bring important policy announcements.
The Sensex fell by more than 300 points in early trade, while the Nifty also slipped. Market participants are waiting to see how budget decisions may impact inflation, growth, taxes, and government spending.
In this environment, even stocks with strong past performance can see short-term weakness. Elitecon’s stock movement reflects this broader trend of caution and uncertainty.
Going forward, investors will closely watch how the company uses its increased borrowing limit. If the funds are used wisely for growth and expansion, it could support the business in the long term. At the same time, higher borrowing also means higher responsibility, as loans need to be managed carefully to avoid financial stress.
The stock being under additional surveillance means traders should be extra careful. Price movements may remain volatile in the short term, and sudden swings are possible.
In summary, Elitecon International Limited remains a stock of interest due to its impressive long-term returns and recent corporate decision. However, short-term weakness, market volatility, and regulatory monitoring suggest that investors should move with caution and keep a close eye on future developments.
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