Chennai Petroleum Corporation Ltd. shares witnessed a sharp reversal on Thursday, continuing its second day of decline after a prolonged rally.
The stock was trading at Rs 1,314 apiece, down Rs 64.70 or 4.62%, against its previous close at Rs 1,379.5 on NSE.
CPCL shares had been on a strong upward trajectory despite pressure on profitability in the June quarter. The stock had gained around 14% over a month. It has delivered a 102.3% return over the past year.
The latest decline therefore comes after a substantial rally, making the sustainability of the gains an important focus for investors.
Q1 Profitability Under Pressure
CPCL's revenue rose 43.5% quarter-on-quarter to Rs 27,370 crore in the June quarter from Rs 16,817 crore in the March quarter. However, net profit declined 27% sequentially to Rs 1,017 crore from Rs 1,400 crore in the preceding quarter.
Operating profitability also weakened with earnings before interest, taxes, depreciation, and amortisation (Ebitda) falling by 23.6% to Rs 1,555 crore from Rs 2,036 crore, while Ebitda margin narrowed to 5.7% from 12.1%.
The company has also recommended a final dividend of Rs 54 per share for FY26, subject to shareholder approval.
For investors, the key question now is whether CPCL's recent rally can be sustained despite the sequential pressure on profit and operating margins.
Stock Movement
The stock rallied over 10% on Tuesday itself, closing at Rs 1,418 apiece on NSE, and since then it has declined more than 7% in two consecutive sessions.
The stock traded within a range of Rs 1,103.6 to Rs 1,655.4 apiece in the past 52 weeks, and currently, it is trading at a price-to-earnings multiple of 4.92 times.
Also Read: 100% Return In One Year: Chennai Petroleum Corporation Stock Surges 10% In Trade
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.