AKZOINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.2
| Stock Code | AKZOINDIA | Market Cap | 13,124 Cr. | Current Price | 2,885 ₹ | High / Low | 3,916 ₹ |
| Stock P/E | 34.9 | Book Value | 495 ₹ | Dividend Yield | 3.47 % | ROCE | 41.7 % |
| ROE | 32.2 % | Face Value | 10.0 ₹ | DMA 50 | 3,107 ₹ | DMA 200 | 3,307 ₹ |
| Chg in FII Hold | 0.69 % | Chg in DII Hold | 6.81 % | PAT Qtr | 94.6 Cr. | PAT Prev Qtr | 83.4 Cr. |
| RSI | 39.8 | MACD | -106 | Volume | 23,153 | Avg Vol 1Wk | 44,382 |
| Low price | 2,649 ₹ | High price | 3,916 ₹ | PEG Ratio | 2.50 | Debt to equity | 0.03 |
| 52w Index | 18.6 % | Qtr Profit Var | -12.9 % | EPS | 429 ₹ | Industry PE | 34.2 |
📊 Analysis: AKZOINDIA demonstrates strong fundamentals with ROE at 32.2% and ROCE at 41.7%, reflecting excellent capital efficiency. Debt-to-equity is negligible at 0.03, ensuring financial stability. Dividend yield of 3.47% adds strong income potential, making it attractive for long-term investors. EPS of ₹429 supports profitability. However, the P/E of 34.9 is slightly above the industry average of 34.2, indicating premium valuation. The PEG ratio of 2.50 suggests moderate overvaluation relative to growth. Technicals show weakness: RSI at 39.8 (near oversold), MACD negative (-106), and price below DMA 50 and DMA 200, signaling bearish momentum. Quarterly PAT declined (-12.9%), which raises caution, but overall fundamentals remain robust.
💡 Entry Price Zone: Ideal accumulation range is between ₹2,650 – ₹2,800, closer to the 52-week low, offering better valuation comfort and alignment with technical support.
⏳ Exit / Holding Strategy: Long-term investors (3–5 years) can hold given strong ROE/ROCE and attractive dividend yield. Exit or partial profit booking should be considered near ₹3,800–₹3,900 resistance levels if valuations stretch further without earnings growth acceleration.
Positive ✅
- Strong ROE (32.2%) and ROCE (41.7%) highlight excellent capital efficiency.
- Debt-to-equity of 0.03 ensures financial stability.
- Dividend yield of 3.47% provides attractive income potential.
- DII holdings increased by 6.81%, reflecting strong domestic institutional confidence.
- EPS of ₹429 supports profitability.
Limitation ⚠️
- P/E of 34.9 is slightly above industry average (34.2).
- PEG ratio of 2.50 signals moderate overvaluation relative to growth.
- Quarterly PAT declined (-12.9%), raising concerns about earnings consistency.
- Weak technicals: RSI near oversold, MACD negative, price below DMA 50 & DMA 200.
Company Negative News 📉
- Recent quarterly profit decline (-12.9%) indicates short-term weakness.
Company Positive News 📈
- Strong fundamentals with high ROE and ROCE.
- Dividend yield of 3.47% adds investor appeal.
- DII confidence increased significantly with higher holdings.
Industry 🌐
- Industry P/E at 34.2 indicates moderate valuation levels.
- Paints and coatings sector benefits from infrastructure growth and housing demand.
Conclusion 📝
AKZOINDIA is a fundamentally strong company with excellent ROE/ROCE, low debt, and attractive dividend yield. While valuations are slightly stretched and technicals weak, long-term investors can accumulate near ₹2,650–₹2,800 for better risk-reward. Existing holders should maintain a 3–5 year horizon, with partial profit booking near ₹3,800–₹3,900 resistance levels if earnings growth does not accelerate further.