ANANDRATHI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | ANANDRATHI | Market Cap | 24,476 Cr. | Current Price | 2,948 ₹ | High / Low | 3,324 ₹ |
| Stock P/E | 67.7 | Book Value | 100 ₹ | Dividend Yield | 0.36 % | ROCE | 54.0 % |
| ROE | 42.7 % | Face Value | 5.00 ₹ | DMA 50 | 2,997 ₹ | DMA 200 | 2,706 ₹ |
| Chg in FII Hold | 1.10 % | Chg in DII Hold | 0.72 % | PAT Qtr | 99.8 Cr. | PAT Prev Qtr | 97.2 Cr. |
| RSI | 45.4 | MACD | -36.9 | Volume | 1,44,257 | Avg Vol 1Wk | 2,02,821 |
| Low price | 1,586 ₹ | High price | 3,324 ₹ | PEG Ratio | 2.05 | Debt to equity | 0.10 |
| 52w Index | 78.4 % | Qtr Profit Var | 31.8 % | EPS | 43.6 ₹ | Industry PE | 50.2 |
📊 Analysis: ANANDRATHI demonstrates strong fundamentals with ROE at 42.7% and ROCE at 54.0%, reflecting excellent capital efficiency. Debt-to-equity is low at 0.10, ensuring financial stability. EPS of ₹43.6 supports profitability, and quarterly PAT growth (99.8 Cr vs 97.2 Cr) shows earnings momentum. However, the P/E of 67.7 is significantly higher than the industry average of 50.2, suggesting premium valuation. The PEG ratio of 2.05 indicates moderate overvaluation relative to growth. Dividend yield of 0.36% is modest, offering limited income support. Technicals show weakness: MACD negative (-36.9), RSI neutral (45.4), and price hovering near DMA 50, signaling consolidation. Despite stretched valuations, strong fundamentals and institutional confidence make it a promising long-term candidate.
💡 Entry Price Zone: Ideal accumulation range is between ₹2,700 – ₹2,850, closer to DMA 200 support levels, offering better valuation comfort.
⏳ Exit / Holding Strategy: Long-term investors (3–5 years) can hold given strong ROE/ROCE and consistent profitability. Exit or partial profit booking should be considered near ₹3,250–₹3,300 resistance levels if valuations stretch further without earnings growth acceleration.
Positive ✅
- Strong ROE (42.7%) and ROCE (54.0%) highlight excellent capital efficiency.
- Low debt-to-equity (0.10) ensures financial stability.
- Quarterly PAT growth of 31.8% shows earnings momentum.
- FII holdings increased by 1.10% and DII holdings by 0.72%, reflecting institutional confidence.
- 52-week index return of 78.4% highlights strong past performance.
Limitation ⚠️
- High P/E (67.7) compared to industry average (50.2).
- PEG ratio of 2.05 signals moderate overvaluation relative to growth.
- Dividend yield of 0.36% is modest.
- Weak technicals: MACD negative, RSI neutral, price near DMA 50.
Company Negative News 📉
- No major negative news reported, but stretched valuations remain a concern.
Company Positive News 📈
- Strong fundamentals with high ROE and ROCE.
- Quarterly profit growth supports earnings consistency.
- Institutional confidence with increased FII and DII holdings.
Industry 🌐
- Industry P/E at 50.2 indicates premium valuations across the sector.
- Financial services sector benefits from rising demand in wealth management and advisory services.
Conclusion 📝
ANANDRATHI is a fundamentally strong company with excellent ROE/ROCE, low debt, and consistent profitability. While valuations are stretched, long-term investors can accumulate near ₹2,700–₹2,850 for better risk-reward. Existing holders should maintain a 3–5 year horizon, with partial profit booking near ₹3,250–₹3,300 resistance levels if earnings growth does not accelerate further.