Multibagger small-cap stock Dee Development jumped 5% to hit a record high in intraday trade on Tuesday, 26 May. Dee Development shares opened at ₹550 on the BSE against their previous close of ₹549.60 and jumped 5% to their all-time high of ₹577.
The small-cap stock, however, witnessed some profit booking and dropped more than 4% during the session due to profit booking amid weak market sentiment and the stock’s recent stellar gains. If the stock closes lower on Tuesday, it will snap a four-session winning streak during which it rallied 5% each day.
Dee Development share price trend
shares have delivered multibagger returns this year. Year-to-date (YTD), the small-cap stock has surged almost 160%, compared to a 10% fall in the benchmark Sensex.
On a monthly scale, Dee Development’s share price has jumped 30% so far in May after a 55% surge in April.
The industrial stock plumbed a 52-week low of ₹183.35 on 27 January this year, falling 10% in the same month. But in February it vaulted 57%, followed by a 9% fall in March. At this juncture, the stock appears set to extend gains for the second consecutive month in May.
Mirae Asset Sharekhan sees further upside
Domestic brokerage firm Mirae Asset Sharekhan is positive about the stock, highlighting the strong growth prospects of the company, as it has a healthy order book position that is diversified across key sectors and geographies.
The brokerage firm underscored that Dee Development is on a strong earnings growth trajectory, led by its capacity expansion plans, leading industry position, incremental order inflows from margin accretive sectors, operating profit margin expansion levers, and process piping industry growth tailwinds.
“We expect the company to deliver a strong revenue and PAT CAGR growth of 26% and 55%, respectively, over FY26-28E. At the base case estimates, we remain positive and assign a target price of ₹650,” said Mirae Asset Sharekhan in a report on 22 May.
During market hours on 21 May, Dee Development reported a 26.3% YoY and 26.1% QoQ rise in revenue from operations to ₹361.6 crore from Q4FY26.
Profit after tax (PAT), for the quarter under review, jumped 49.2% QoQ but slipped 12.2% YoY to ₹27.7 crore.
Operating EBITDA also jumped 33.6% QoQ and remained flat YoY at ₹63.6%, while operating EBITDA margin climbed 98 bps QoQ but dropped 458 bps YoY at 17.6%.
Dee Development technical view
The recent sharp rally in the stock appears to have made technical experts cautious about the stock for the near term.
Vipin Kumar, AVP- Equity Research and PMS at Globe Capital Market, underscored that investors may consider booking some profit as Dee Development Engineers shares have surged from ₹183 to ₹573 in less than five months.
“With the stock frequently hitting its daily price bands on both sides, we advise traders to adopt a cautious approach. Consider booking profits or maintaining strict stop losses given this vertical rise and high volatility,” said Kumar.
Aditya Thukral, Founder and Analyst of AT Research and Risk Managers, highlighted that Dee Development Engineers has been in an uptrend with the formation of higher highs and higher lows.
Thukral pointed out that the stock is consistently sustaining above all the major exponential moving averages. However, the rally seems stretched, and there are visible signs of exhaustion, based on the occurrence of negative divergence.
“The stock exhibited a positive reversal pattern a few days ago, and the implication of the same pattern has been completed, where stock prices generally hit fresh highs, and the same is the case with this stock,” said Thukral.
“Investors should avoid buying this stock at current levels and should wait for 50% to 61.8% retracement from the bottom of ₹183.35 to the highs of ₹577 to consider a fresh buying opportunity,” said Thukral.
“Though we strongly believe that the rally might fail around current levels, existing investors could still maintain the stop losses of the previous week’s low and continue trailing if the rally continues,” Thukral added.
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Disclaimer: This story is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.