Why Did Concord Biotech Shares Jump 18% Today? Check the Reason

Synopsis: Concord Biotech shares surged 18% after hitting a 52-week low, driven largely by technical factors including oversold RSI levels and aggressive short covering. The rally was supported by optimism ahead of an investor meet, despite ongoing business challenges and a YoY decline in quarterly profit.

The shares of this company, which is an India-based R&D-driven biopharma company and manufacturer of fermentation-based APIs across immunosuppressants and oncology, had its shares in momentum today after the company skyrocketed after hitting its 52-week low, triggering a heavy buying with the stock. 

With a market cap of Rs 12,788 crore, the shares of Concord Biotech Ltd jumped 18% in today’s trading session and reached a high of Rs 1247. When compared to the intraday low price of Rs 1056.75, they are trading at a PE of 40 compared to its industry PE of 28. The shares have given a return of more than 30% since their listing in August 2023.

Why did the shares jump?

Concord Biotech’s 18% intraday jump today was largely a technical event that was triggered by the stock being severely oversold. The stock had been beaten up for almost the entire month of February, with a sharp fall of 18-20% and touching a new 52-week low of Rs 1,056 at the opening bell. At this point, the RSI had fallen deep into the oversold region around 38, indicating a strong mean-reversion signal for technical and algo participants. 

As soon as the stock touched this critical support level, buying orders poured in from bargain hunters and technical participants who had been waiting for just such a capitulation event to take place. A short-covering rally contributed heavily to the sharp upmove. With the stock down 50% from its peak of Rs 2,150, a substantial number of short positions had built up over the past few weeks, riding the fall. 

As soon as the stock touched the critical level of 52-week low and started turning around, short sellers panicked and closed their positions; this triggered a self-reinforcing cycle where the short covering drove the stock price up, which in turn triggered more short covering, leading to the sharp 18% intraday pop.

An investor and analyst meeting scheduled for February 25-26 brought a fundamental twist to what otherwise was a purely technical trade. It is common for markets to price in some optimism before management engagement, hoping for positive guidance on order book recovery, the new injectable facility start-up, and Middle East tender deferrals. 

Though the underlying business continues to face genuine challenges in the form of immunosuppressant API pricing, CDSCO delays, and U.S. tariff uncertainty, today’s relief rally indicates that at Rs 1,056, the market may have factored in the worst. Whether this represents a genuine turning point or merely a relief rally will depend entirely on what management has to say over the next two days.

Financials 

The revenue from operations for the company stood at Rs 278 crores in Q3 FY26 compared to Q3 FY25 revenue of Rs 244 crores, up YoY. However, the net profit stood at Rs 64 crore in Q3 FY26, down compared to the Rs 76 crore profit in Q3 FY25.

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