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ONESOURCE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.2
| Stock Code | ONESOURCE | Market Cap | 13,952 Cr. | Current Price | 1,210 ₹ | High / Low | 2,250 ₹ |
| Stock P/E | 76.8 | Book Value | 522 ₹ | Dividend Yield | 0.00 % | ROCE | 6.42 % |
| ROE | 4.14 % | Face Value | 1.00 ₹ | DMA 50 | 1,616 ₹ | DMA 200 | 1,731 ₹ |
| Chg in FII Hold | -0.15 % | Chg in DII Hold | 0.32 % | PAT Qtr | -55.1 Cr. | PAT Prev Qtr | 37.1 Cr. |
| RSI | 24.4 | MACD | -145 | Volume | 86,090 | Avg Vol 1Wk | 12,25,687 |
| Low price | 1,057 ₹ | High price | 2,250 ₹ | PEG Ratio | 2.08 | Debt to equity | 0.22 |
| 52w Index | 12.8 % | Qtr Profit Var | -300 % | EPS | 15.2 ₹ | Industry PE | 29.0 |
📊 Core Financials
- Revenue & Profitability: Quarterly PAT slipped from ₹37.1 Cr. to -₹55.1 Cr., showing severe deterioration (-300% variation). EPS at ₹15.2 is not sustainable given losses.
- Return Metrics: ROE at 4.14% and ROCE at 6.42% indicate weak capital efficiency.
- Debt Position: Debt-to-equity ratio at 0.22 reflects moderate leverage, manageable but concerning with losses.
- Cash Flow: No dividend yield (0%), reflecting reinvestment or cash preservation amid weak profitability.
💹 Valuation Indicators
- P/E Ratio: 76.8, far higher than industry average of 29.0, indicating steep overvaluation.
- P/B Ratio: Current Price ₹1,210 vs. Book Value ₹522 → ~2.3, trading at premium despite weak fundamentals.
- PEG Ratio: 2.08, suggesting expensive valuation relative to growth prospects.
- Intrinsic Value: Current valuation appears inflated; intrinsic value likely lower given losses and weak returns.
🏢 Business Model & Competitive Advantage
- Operates in IT services and outsourcing, a sector with long-term demand but intense competition.
- Competitive advantage limited; profitability volatility undermines sustainability.
- Weak financial performance overshadows industry tailwinds.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Risk-tolerant investors may consider accumulation near ₹1,050–1,100, closer to 52-week low.
- Long-Term Holding: Not recommended until profitability stabilizes; speculative exposure only for aggressive investors.
Positive
- Moderate debt-to-equity ratio (0.22), limiting leverage risk.
- DII holdings increased (+0.32%), showing some domestic institutional support.
- RSI at 24.4 indicates oversold condition, potential for short-term rebound.
Limitation
- Quarterly losses of -₹55.1 Cr. highlight weak financial health.
- High P/E ratio (76.8) compared to industry average (29.0).
- Low ROE (4.14%) and ROCE (6.42%).
- No dividend yield, limiting investor returns.
Company Negative News
- Sharp decline in quarterly profits (-300% variation).
- FII holdings reduced (-0.15%), showing lower foreign investor confidence.
- MACD negative (-145), signaling strong bearish momentum.
Company Positive News
- DII holdings increased, reflecting domestic institutional support.
- RSI oversold, potential for technical rebound.
Industry
- IT services industry P/E at 29.0, much lower than ONESOURCE’s 76.8, highlighting overvaluation.
- Sector outlook supported by global outsourcing demand, but company-specific fundamentals remain weak.
Conclusion
- ONESOURCE shows weak profitability and overvaluation despite industry tailwinds.
- High multiples and losses make it unattractive for conservative investors.
- Speculative entry near ₹1,050–1,100 may be considered, but long-term holding is risky until financial performance stabilizes.
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