I have read the BSE clarification provided by Cupid yesterday night and thought to myself, Mr. Garg, do not worry, this is called market re-rating. Typically re-rating will be ferocious and will be over even before people realise. This re-rating was expected after the Q2 results were announced as indicated in my earlier post that several factors are improving in company’s favour.
- Re-rating is the way market recognises all the hard work the promoters have been putting in consistently and then rewards you with higher market cap.
- While the re-rating is in progress, short term players looking for quick buck will come in, typically when most of the re-rating is underway and push the stock prices up. A little bit of bad always comes with good. Long term holders must realise this and build positions based on their conviction.
- I felt pleasantly surprised that Cupid has released a statement to BSE by themselves and before exchanges probed. Very good touch.
- Any further earnings visibility and market will start discounting 1 year ahead earnings as well.
- For the re-rating to sustain, earnings visibility, promoter integrity, growth with margins oriented focus and shareholder friendliness are the pillars and I believe Cupid has these qualities.
- Cupid’s Tagline, at least for African nations, should be, “Cometh the hour cometh the company!”
Disclosure: I hold Cupid and I’m biased.
BSE announcement:
Cupid Ltd has informed BSE that :
“In the interest of keeping with good corporate governance practices and to keep the public shareholders informed, we would like to clarify that the Company is not aware of the reason of this increase in the price. Further, there is no information / announcement (including impending announcement), which in our opinion, may have a bearing on the operation / performance of the Company or on the price behavior in the scrip including any price sensitive information and which are not disclosed to the Stock Exchange.”
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