Shares of MosChip Technologies tumbled 10% on Tuesday to Rs 236.20 on the BSE, reversing part of a blistering seven-session rally that had lifted the stock nearly 60% to a record high. The sharp pullback amid overbought technicals has investors weighing whether the decline is a buying opportunity or the start of broader profit-taking.
MosChip Technologies had soared 59% in just seven trading sessions, a rally that pushed the stock to a 52-week high of Rs 268.75 and made it one of the biggest beneficiaries of India’s semiconductor push. The surge, driven by record volumes and policy momentum, had thrust the stock into overbought territory, leaving investors cautious.
More than 1 crore shares changed hands on September 8, far above the 20-day average of 10 lakh. Investor enthusiasm was buoyed by Prime Minister Narendra Modi’s remarks at the Semicon India 2025 Summit, where he said India is poised to capture a significant share of the $1 trillion global semiconductor market.
Modi cited policy support, infrastructure development, and talent skilling, while confirming work is underway on the second phase of the India Semiconductor Mission (ISM 2.0).
The Ministry of Electronics and Information Technology said the first phase of ISM has already attracted Rs 1.5 lakh crore in investments across 10 projects. Union Minister Ashwini Vaishnaw added that India’s design strength and manufacturing base position the country well in global supply chains. According to a report in The Economic Times, a cabinet note for ISM 2.0 is expected by the end of October, expanding support to compound semiconductor fabs, advanced packaging, display fabs, equipment makers, and fabless design companies.
Technical indicators flash caution
From a technical perspective, MosChip is trading above most of its key simple moving averages, but Tuesday’s 10% fall to Rs 236.20 pulled the stock closer to near-term support at Rs 230–Rs 235. The Relative Strength Index remains elevated at 85.5, signalling overbought conditions, while the MACD continues in bullish territory at 11.3.
“MosChip is trading close to heavy resistance clusters. Immediate hurdles are at Rs 272–Rs 286, with Rs 290 emerging as a psychological ceiling,” said Harshal Dasani, Business Head, INVasset PMS. “Historically, profit booking accelerates when the stock trades more than 20% above its 50-day moving average; at current levels, that condition is met.”
Dasani said that if the stock consolidates above Rs 230–235, it may build a base for another leg higher, but “a breakdown below that could trigger short-term profit taking.”
Hardik Matalia, Derivative Analyst at Choice Broking, noted that MosChip had broken out of a consolidation zone and rallied nearly 55% in the last five sessions on strong volumes. “The RSI is placed at 87.90, indicating overbought territory,” he said. “For short-term traders who entered from lower levels, it is advisable to book partial profits at current levels and look for fresh entry opportunities on any meaningful dips.”
Drumil Vithlani, Technical Research Analyst at Bonanza, flagged Rs 270–275 as near-term resistance and Rs 230–235 as strong support. “With the stock retreating to Rs 236, Rs 230–235 becomes an important support zone. Medium-term, if the momentum sustains above Rs 300, the next potential upside opens toward Rs 340–360,” he said.
Valuation concerns
At current levels, MosChip trades at a trailing P/E of around 125x and a P/B of roughly 15x, compared with global semiconductor design peers at 25–40x earnings. “The premium valuation reflects expectations that revenues will rise toward Rs 600–Rs 700 crore in FY26,” said Dasani. “Still, this leaves little margin for error. Even modest execution misses or order delays could trigger sharp multiple compression.”
Dasani added that while MosChip’s low leverage provides some comfort, “profitability remains uneven and free cash flows are yet to stabilise. Current valuations appear speculative, supported more by policy optimism than by near-term fundamentals.”
Shareholding risks
Promoters hold 44.28% of MosChip with no pledged shares, while more than 2.5 lakh small retail investors own 37.1%. Institutional and mutual fund ownership is absent. Dasani said this structure “magnifies both corrections and rebounds” as price discovery is “retail-driven and short-lived.”
Also read | Mahindra & Mahindra shares soar 14% in 4 days on GST boost. Analysts eye Rs 4,000 next
Matalia suggested that for long-term investors, dips could be used as accumulation opportunities. “Those already holding can maintain their positions, while new investors might consider entering on support dips around Rs 230–235, as the strong price-volume breakout highlights confidence in the stock’s future growth potential,” he said.
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
MosChip Technologies had soared 59% in just seven trading sessions, a rally that pushed the stock to a 52-week high of Rs 268.75 and made it one of the biggest beneficiaries of India’s semiconductor push. The surge, driven by record volumes and policy momentum, had thrust the stock into overbought territory, leaving investors cautious.
More than 1 crore shares changed hands on September 8, far above the 20-day average of 10 lakh. Investor enthusiasm was buoyed by Prime Minister Narendra Modi’s remarks at the Semicon India 2025 Summit, where he said India is poised to capture a significant share of the $1 trillion global semiconductor market.
Modi cited policy support, infrastructure development, and talent skilling, while confirming work is underway on the second phase of the India Semiconductor Mission (ISM 2.0).
The Ministry of Electronics and Information Technology said the first phase of ISM has already attracted Rs 1.5 lakh crore in investments across 10 projects. Union Minister Ashwini Vaishnaw added that India’s design strength and manufacturing base position the country well in global supply chains. According to a report in The Economic Times, a cabinet note for ISM 2.0 is expected by the end of October, expanding support to compound semiconductor fabs, advanced packaging, display fabs, equipment makers, and fabless design companies.
Technical indicators flash caution
From a technical perspective, MosChip is trading above most of its key simple moving averages, but Tuesday’s 10% fall to Rs 236.20 pulled the stock closer to near-term support at Rs 230–Rs 235. The Relative Strength Index remains elevated at 85.5, signalling overbought conditions, while the MACD continues in bullish territory at 11.3.
“MosChip is trading close to heavy resistance clusters. Immediate hurdles are at Rs 272–Rs 286, with Rs 290 emerging as a psychological ceiling,” said Harshal Dasani, Business Head, INVasset PMS. “Historically, profit booking accelerates when the stock trades more than 20% above its 50-day moving average; at current levels, that condition is met.”
Dasani said that if the stock consolidates above Rs 230–235, it may build a base for another leg higher, but “a breakdown below that could trigger short-term profit taking.”
Hardik Matalia, Derivative Analyst at Choice Broking, noted that MosChip had broken out of a consolidation zone and rallied nearly 55% in the last five sessions on strong volumes. “The RSI is placed at 87.90, indicating overbought territory,” he said. “For short-term traders who entered from lower levels, it is advisable to book partial profits at current levels and look for fresh entry opportunities on any meaningful dips.”
Drumil Vithlani, Technical Research Analyst at Bonanza, flagged Rs 270–275 as near-term resistance and Rs 230–235 as strong support. “With the stock retreating to Rs 236, Rs 230–235 becomes an important support zone. Medium-term, if the momentum sustains above Rs 300, the next potential upside opens toward Rs 340–360,” he said.
Valuation concerns
At current levels, MosChip trades at a trailing P/E of around 125x and a P/B of roughly 15x, compared with global semiconductor design peers at 25–40x earnings. “The premium valuation reflects expectations that revenues will rise toward Rs 600–Rs 700 crore in FY26,” said Dasani. “Still, this leaves little margin for error. Even modest execution misses or order delays could trigger sharp multiple compression.”
Dasani added that while MosChip’s low leverage provides some comfort, “profitability remains uneven and free cash flows are yet to stabilise. Current valuations appear speculative, supported more by policy optimism than by near-term fundamentals.”
Shareholding risks
Promoters hold 44.28% of MosChip with no pledged shares, while more than 2.5 lakh small retail investors own 37.1%. Institutional and mutual fund ownership is absent. Dasani said this structure “magnifies both corrections and rebounds” as price discovery is “retail-driven and short-lived.”
Also read | Mahindra & Mahindra shares soar 14% in 4 days on GST boost. Analysts eye Rs 4,000 next
Matalia suggested that for long-term investors, dips could be used as accumulation opportunities. “Those already holding can maintain their positions, while new investors might consider entering on support dips around Rs 230–235, as the strong price-volume breakout highlights confidence in the stock’s future growth potential,” he said.
( Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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