ABLBL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.7
| Stock Code | ABLBL | Market Cap | 14,207 Cr. | Current Price | 116 ₹ | High / Low | 176 ₹ |
| Stock P/E | 81.4 | Book Value | 10.8 ₹ | Dividend Yield | 0.00 % | ROCE | % |
| ROE | 10.7 % | Face Value | 10.0 ₹ | DMA 50 | 119 ₹ | DMA 200 | 136 ₹ |
| Chg in FII Hold | -5.34 % | Chg in DII Hold | 5.57 % | PAT Qtr | 97.3 Cr. | PAT Prev Qtr | 22.6 Cr. |
| RSI | 54.5 | MACD | -3.72 | Volume | 20,23,501 | Avg Vol 1Wk | 25,84,090 |
| Low price | 101 ₹ | High price | 176 ₹ | Debt to equity | 2.56 | 52w Index | 20.6 % |
| Qtr Profit Var | 59.0 % | EPS | ₹ | Industry PE | 43.7 |
📊 Aditya Birla Loan & Leasing (ABLBL) trades at a steep valuation (P/E 81.4 vs industry 43.7), which is expensive relative to peers. Profitability metrics are modest with ROE (10.7%), while ROCE data is unavailable, limiting clarity on efficiency. Dividend yield is nil (0.00%), offering no income return. Debt-to-equity ratio is high (2.56), reflecting significant leverage risk. Quarterly PAT improved sharply (97.3 Cr. vs 22.6 Cr.), showing earnings momentum, but sustainability remains uncertain. Technical indicators show neutral sentiment (RSI 54.5, MACD negative), with the stock trading below its 200 DMA (136 ₹), indicating weak long-term trend.
💡 Ideal Entry Price Zone: 100 ₹ – 110 ₹, closer to long-term support and valuation comfort. Current price (116 ₹) is slightly above fair entry levels.
📌 Exit Strategy / Holding Period: If already holding, consider partial exit near 150–160 ₹ resistance levels. Long-term investors should only hold if expecting sustained improvement in profitability and reduction in leverage. Otherwise, reallocate capital to peers with stronger ROE/ROCE and better dividend yield.
Positive
- Quarterly PAT growth of 59% (22.6 Cr. to 97.3 Cr.).
- ROE of 10.7% shows moderate profitability.
- DII holdings increased significantly (+5.57%), reflecting strong domestic institutional support.
Limitation
- High P/E ratio (81.4) compared to industry average (43.7).
- Dividend yield is nil (0.00%), offering no income return.
- High debt-to-equity ratio (2.56) adds financial risk.
- Stock trading below 200 DMA (136 ₹) indicates weak long-term momentum.
Company Negative News
- FII holdings decreased (-5.34%), showing reduced foreign investor confidence.
- MACD negative (-3.72) suggests bearish short-term trend.
Company Positive News
- Quarterly PAT improved significantly from 22.6 Cr. to 97.3 Cr.
- DII holdings increased strongly (+5.57%).
Industry
- Industry P/E is 43.7, highlighting ABLBL’s steep premium valuation.
- Financial services sector has long-term demand potential driven by credit expansion in India.
Conclusion
⚠️ ABLBL is currently overvalued with high leverage and modest profitability. It is not an ideal candidate for long-term investment at current levels. Entry should be considered only around 100–110 ₹ for valuation comfort. Existing holders may exit near 150–160 ₹ resistance unless ROE improves significantly and earnings growth becomes sustainable.