FSL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | FSL | Market Cap | 15,126 Cr. | Current Price | 214 ₹ | High / Low | 404 ₹ |
| Stock P/E | 32.2 | Book Value | 37.2 ₹ | Dividend Yield | 2.57 % | ROCE | 16.9 % |
| ROE | 15.3 % | Face Value | 10.0 ₹ | DMA 50 | 235 ₹ | DMA 200 | 292 ₹ |
| Chg in FII Hold | -0.35 % | Chg in DII Hold | 0.30 % | PAT Qtr | 144 Cr. | PAT Prev Qtr | 98.0 Cr. |
| RSI | 43.8 | MACD | -3.58 | Volume | 17,33,331 | Avg Vol 1Wk | 16,88,562 |
| Low price | 201 ₹ | High price | 404 ₹ | PEG Ratio | -82.6 | Debt to equity | 0.32 |
| 52w Index | 6.56 % | Qtr Profit Var | 39.8 % | EPS | 5.44 ₹ | Industry PE | 20.8 |
Financials & Valuation:
FSL shows moderate fundamentals. ROCE (16.9%) and ROE (15.3%) reflect decent efficiency, but EPS of 5.44 ₹ is modest relative to valuation. Quarterly PAT improved to 144 Cr. from 98 Cr., showing growth momentum. Debt-to-equity at 0.32 is manageable, though slightly elevated compared to peers.
Valuation Indicators:
P/E ratio of 32.2 is higher than the industry average (20.8), suggesting overvaluation. Book Value of 37.2 ₹ compared to current price of 214 ₹ shows premium pricing. PEG ratio of -82.6 highlights valuation concerns relative to growth. Dividend yield of 2.57% provides attractive income support.
Business Model & Health:
FSL, an IT services and outsourcing company, benefits from global demand for digital transformation and BPO services. Profitability metrics are decent, but valuation remains stretched. Institutional sentiment is mixed, with FII holdings declining (-0.35%) and DII holdings increasing (+0.30%).
Entry Zone & Holding Guidance:
Technically, support lies around 205–215 ₹, with resistance near 230–240 ₹. Entry near support levels offers favorable risk-reward. Long-term holding should be cautious until valuations align with industry benchmarks, though dividend yield provides some comfort.
Positive
- ROCE (16.9%) and ROE (15.3%) show decent efficiency.
- EPS of 5.44 ₹ supports profitability.
- Dividend yield of 2.57% provides income support.
- DII holdings increased (+0.30%).
Limitation
- High P/E (32.2) vs industry average (20.8).
- PEG ratio (-82.6) indicates valuation concerns.
- EPS remains modest relative to price.
- RSI (43.8) and MACD (-3.58) show weak momentum.
Company Negative News
- Decline in FII holdings (-0.35%).
- Valuation premium compared to peers.
- Weak technical indicators.
Company Positive News
- Quarterly PAT improved to 144 Cr. from 98 Cr.
- DII holdings increased, reflecting domestic support.
- Dividend yield remains attractive.
Industry
- IT services sector benefits from global outsourcing and digital demand.
- Industry PE (20.8) is lower than FSL’s, highlighting overvaluation.
- Long-term growth supported by digital transformation trends.
Conclusion
FSL is moderately strong with decent profitability and dividend yield, but faces valuation concerns and weak technical momentum. Entry near 205–215 ₹ offers a favorable setup. Long-term investors should hold cautiously, monitoring earnings growth and valuation alignment.
Would you like me to extend this into a peer benchmarking overlay comparing FSL against Tech Mahindra, HCL Tech, and Coforge to highlight relative positioning in valuation and profitability?