ANANTRAJ - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.9
| Stock Code | ANANTRAJ | Market Cap | 19,963 Cr. | Current Price | 555 ₹ | High / Low | 744 ₹ |
| Stock P/E | 69.7 | Book Value | 106 ₹ | Dividend Yield | 0.13 % | ROCE | 6.71 % |
| ROE | 6.17 % | Face Value | 2.00 ₹ | DMA 50 | 553 ₹ | DMA 200 | 571 ₹ |
| Chg in FII Hold | 0.42 % | Chg in DII Hold | -0.62 % | PAT Qtr | 77.5 Cr. | PAT Prev Qtr | 74.2 Cr. |
| RSI | 54.3 | MACD | -4.58 | Volume | 40,38,922 | Avg Vol 1Wk | 1,48,68,733 |
| Low price | 366 ₹ | High price | 744 ₹ | PEG Ratio | 1.21 | Debt to equity | 0.11 |
| 52w Index | 50.0 % | Qtr Profit Var | 32.8 % | EPS | 8.24 ₹ | Industry PE | 31.6 |
📊 Analysis: ANANTRAJ shows weak fundamentals for long-term investment. ROE at 6.17% and ROCE at 6.71% are below desirable levels, reflecting poor capital efficiency. Debt-to-equity is low at 0.11, ensuring financial stability, but profitability remains modest. EPS of ₹8.24 is low relative to price, and dividend yield of 0.13% offers negligible income support. The P/E of 69.7 is more than double the industry average of 31.6, suggesting severe overvaluation. The PEG ratio of 1.21 indicates fair valuation relative to growth, but quarterly PAT growth is modest (77.5 Cr vs 74.2 Cr). Technicals are weak: MACD negative (-4.58), RSI neutral (54.3), and price below DMA 200, signaling consolidation. Despite strong 52-week index return (50%), fundamentals remain stretched.
💡 Entry Price Zone: Ideal accumulation range is between ₹450 – ₹500, closer to the 52-week low, offering better valuation comfort.
⏳ Exit / Holding Strategy: If already holding, maintain a short-to-medium horizon (1–2 years) and consider partial profit booking near ₹700–₹740 resistance levels. Long-term holding is not advisable unless ROE/ROCE improve significantly and valuations normalize.
Positive ✅
- Low debt-to-equity (0.11) ensures financial stability.
- Quarterly PAT growth (32.8%) shows earnings momentum.
- FII holdings increased by 0.42%, reflecting foreign investor confidence.
- Strong 52-week index return of 50% highlights past performance momentum.
Limitation ⚠️
- Weak ROE (6.17%) and ROCE (6.71%).
- Extremely high P/E (69.7) compared to industry average (31.6).
- Dividend yield of 0.13% is negligible.
- EPS of ₹8.24 is low relative to price.
- Weak technicals: MACD negative, price below DMA 200.
- DII holdings decreased (-0.62%), showing reduced domestic institutional confidence.
Company Negative News 📉
- High valuation with weak profitability metrics raises concerns.
Company Positive News 📈
- Quarterly profit growth indicates operational improvement.
- Strong 52-week performance with 50% return.
Industry 🌐
- Industry P/E at 31.6 indicates moderate valuation levels.
- Real estate and infrastructure sector benefits from long-term demand and government initiatives.
Conclusion 📝
ANANTRAJ is fundamentally weak with low ROE/ROCE and stretched valuations, making it unsuitable for long-term investment. While short-term momentum exists, investors should only consider entry near ₹450–₹500 for risk-adjusted returns. Existing holders should look to exit near ₹700–₹740 resistance levels unless profitability metrics improve significantly.