⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
SIGNATURE - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.5
| Stock Code | SIGNATURE | Market Cap | 12,634 Cr. | Current Price | 899 ₹ | High / Low | 1,340 ₹ |
| Stock P/E | 190 | Book Value | 66.1 ₹ | Dividend Yield | 0.00 % | ROCE | 9.40 % |
| ROE | 6.69 % | Face Value | 1.00 ₹ | DMA 50 | 1,012 ₹ | DMA 200 | 1,108 ₹ |
| Chg in FII Hold | -0.46 % | Chg in DII Hold | -0.35 % | PAT Qtr | -26.5 Cr. | PAT Prev Qtr | 13.0 Cr. |
| RSI | 37.2 | MACD | -61.2 | Volume | 3,36,335 | Avg Vol 1Wk | 16,47,099 |
| Low price | 774 ₹ | High price | 1,340 ₹ | PEG Ratio | 4.53 | Debt to equity | 2.31 |
| 52w Index | 22.0 % | Qtr Profit Var | -560 % | EPS | 4.73 ₹ | Industry PE | 30.2 |
📊 Core Financials
- Quarterly PAT at -26.5 Cr vs 13.0 Cr previously, showing sharp deterioration in profitability (-560% variation).
- ROE at 6.69% and ROCE at 9.40% reflect weak capital efficiency.
- Debt-to-equity ratio at 2.31 indicates high leverage, raising financial risk.
- EPS at 4.73 ₹ highlights low earnings power relative to valuation.
💹 Valuation Indicators
- P/E ratio: 190, extremely high compared to industry average of 30.2, suggesting severe overvaluation.
- P/B ratio: ~13.6 (899 ₹ / 66.1 ₹ book value), showing extreme premium pricing.
- PEG ratio: 4.53, indicating poor growth-adjusted valuation.
- Intrinsic value appears significantly lower than current price, no margin of safety.
🏢 Business Model & Competitive Advantage
- Signature operates in consumer-focused businesses, but profitability remains inconsistent.
- Competitive advantage is limited due to weak margins and high debt burden.
- Business health is fragile, requiring turnaround in earnings to sustain valuations.
📈 Entry Zone & Long-Term Guidance
- Entry zone: 770–820 ₹ range (near recent low of 774 ₹ and RSI at 37.2, oversold zone).
- Long-term holding only suitable for high-risk investors betting on turnaround.
- Accumulation should be avoided until profitability stabilizes and debt reduces.
Positive
- Stock trading near oversold RSI levels, potential for technical rebound.
- Strong revenue potential if debt restructuring and profitability improve.
Limitation
- Extremely high P/E (190) compared to industry average (30.2).
- High debt-to-equity ratio (2.31), raising financial risk.
- Negative PAT and weak EPS (4.73 ₹).
Company Negative News
- Quarterly losses widened sharply (-26.5 Cr vs 13.0 Cr profit).
- FII holdings decreased (-0.46%) and DII holdings also declined (-0.35%).
- Stock trading below 50 DMA (1,012 ₹) and 200 DMA (1,108 ₹), reflecting bearish trend.
Company Positive News
- Potential rebound zone near 774 ₹ low.
- Sector demand could support recovery if financial restructuring occurs.
Industry
- Industry PE at 30.2, much lower than Signature’s 190, highlighting sector undervaluation relative to Signature.
- Consumer-focused businesses expected to grow steadily, but Signature lags peers in profitability.
Conclusion
- Signature faces weak fundamentals with losses, high debt, and extreme valuations.
- Accumulation only near 770–820 ₹ for speculative investors willing to take higher risk.
- Long-term holding depends on earnings turnaround and debt reduction; currently not attractive for conservative investors.
I can also extend this into a peer comparison with other mid-cap consumer companies to highlight how Signature stacks up in valuation and profitability. Would you like me to draft that next?