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FSL - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.3
| Stock Code | FSL | Market Cap | 22,002 Cr. | Current Price | 311 ₹ | High / Low | 404 ₹ |
| Stock P/E | 51.4 | Book Value | 37.2 ₹ | Dividend Yield | 1.29 % | ROCE | 16.9 % |
| ROE | 15.3 % | Face Value | 10.0 ₹ | DMA 50 | 332 ₹ | DMA 200 | 341 ₹ |
| Chg in FII Hold | -0.05 % | Chg in DII Hold | 0.56 % | PAT Qtr | 98.0 Cr. | PAT Prev Qtr | 135 Cr. |
| RSI | 38.6 | MACD | -6.38 | Volume | 3,57,409 | Avg Vol 1Wk | 3,74,921 |
| Low price | 270 ₹ | High price | 404 ₹ | PEG Ratio | -132 | Debt to equity | 0.32 |
| 52w Index | 30.4 % | Qtr Profit Var | 6.74 % | EPS | 6.70 ₹ | Industry PE | 33.3 |
📊 Core Financials
- Revenue growth: PAT at 98 Cr vs 135 Cr in previous quarter, showing decline, though YoY profit variation positive at +6.74 %.
- Profit margins: EPS at 6.70 ₹, moderate profitability.
- Debt ratios: Debt-to-equity at 0.32, manageable but adds some leverage risk.
- Cash flows: Supported by profitability, though declining PAT raises caution.
- Return metrics: ROCE 16.9 %, ROE 15.3 % — decent efficiency and shareholder returns.
💹 Valuation Indicators
- P/E ratio: 51.4, significantly above industry average (33.3), suggests premium valuation.
- P/B ratio: Current Price / Book Value ≈ 8.4, expensive relative to assets.
- PEG ratio: -132, not meaningful due to distorted growth expectations.
- Intrinsic value: Valuation stretched, not fully justified by fundamentals.
🏢 Business Model & Competitive Advantage
- Operates in IT services and BPM sector, providing outsourcing and digital transformation solutions.
- Competitive advantage lies in diversified client base and global delivery model.
- Profitability challenges and high valuation limit financial strength.
📈 Entry Zone & Long-Term Guidance
- Entry zone: Attractive near 270–290 ₹ levels, closer to 52-week low support.
- Long-term holding: Cautious; suitable for growth-oriented investors, but fundamentals do not justify current premium valuation.
Positive
- ROCE (16.9 %) and ROE (15.3 %) show decent efficiency.
- Dividend yield at 1.29 % provides steady income.
- DII holdings increased (+0.56 %).
Limitation
- P/E ratio (51.4) far above industry average (33.3).
- EPS at 6.70 ₹ reflects modest profitability.
- Debt-to-equity ratio at 0.32 adds leverage risk.
Company Negative News
- Quarterly PAT declined (98 Cr vs 135 Cr).
- FII holdings decreased (-0.05 %).
- Technical indicators weak: RSI at 38.6, MACD negative.
Company Positive News
- YoY profit variation positive (+6.74 %).
- Strong institutional support from DII investors.
- Dividend yield supports investor confidence.
Industry
- IT services and BPM industry supported by digital transformation demand.
- Industry PE at 33.3, lower than FSL’s valuation, highlighting premium pricing.
Conclusion
- FSL demonstrates moderate fundamentals with decent ROE/ROCE but declining profitability.
- Valuation is stretched compared to industry peers, limiting upside potential.
- Entry advisable only near lower support levels; long-term holding requires caution unless earnings improve significantly.
I can also extend this into a peer comparison HTML snapshot against companies like Tech Mahindra, Wipro, and HCL Tech to highlight FSL’s relative valuation and positioning. Would you like me to set that up?