ASAHIINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | ASAHIINDIA | Market Cap | 24,619 Cr. | Current Price | 964 ₹ | High / Low | 1,074 ₹ |
| Stock P/E | 81.9 | Book Value | 149 ₹ | Dividend Yield | 0.21 % | ROCE | 12.0 % |
| ROE | 13.2 % | Face Value | 1.00 ₹ | DMA 50 | 972 ₹ | DMA 200 | 885 ₹ |
| Chg in FII Hold | 0.01 % | Chg in DII Hold | 0.09 % | PAT Qtr | 108 Cr. | PAT Prev Qtr | 47.5 Cr. |
| RSI | 48.0 | MACD | 0.81 | Volume | 79,834 | Avg Vol 1Wk | 1,20,426 |
| Low price | 577 ₹ | High price | 1,074 ₹ | PEG Ratio | -546 | Debt to equity | 0.74 |
| 52w Index | 77.9 % | Qtr Profit Var | 28.5 % | EPS | 11.9 ₹ | Industry PE | 28.7 |
📊 Analysis: ASAHIINDIA shows weak fundamentals for long-term investment. ROE at 13.2% and ROCE at 12.0% are below desirable levels, reflecting modest capital efficiency. Debt-to-equity at 0.74 is relatively high, adding financial risk. EPS of ₹11.9 is low compared to price, and dividend yield of 0.21% offers negligible income support. The P/E of 81.9 is far above the industry average of 28.7, suggesting severe overvaluation. The PEG ratio is negative (-546), signaling distorted valuation relative to growth. Quarterly PAT improved (108 Cr vs 47.5 Cr), showing earnings momentum, but overall profitability remains weak. Technicals are neutral: RSI at 48.0, MACD slightly positive (0.81), and price near DMA 50 and above DMA 200, indicating consolidation. Despite strong 52-week index return (77.9%), valuations remain stretched.
💡 Entry Price Zone: Ideal accumulation range is between ₹850 – ₹900, closer to DMA 200 support levels, 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 ₹1,050–₹1,070 resistance levels. Long-term holding is not advisable unless ROE/ROCE improve significantly and debt levels reduce.
Positive ✅
- Quarterly PAT growth (108 Cr vs 47.5 Cr) shows earnings momentum.
- Strong 52-week index return of 77.9% highlights past performance strength.
- FII holdings increased slightly (+0.01%) and DII holdings (+0.09%).
Limitation ⚠️
- High P/E (81.9) compared to industry average (28.7).
- Weak ROE (13.2%) and ROCE (12.0%).
- Negative PEG ratio (-546) signals distorted valuation relative to growth.
- High debt-to-equity ratio (0.74) adds financial risk.
- Dividend yield of 0.21% is negligible.
- EPS of ₹11.9 is modest relative to price.
Company Negative News 📉
- High valuation multiples with weak profitability metrics raise concerns about sustainability.
Company Positive News 📈
- Quarterly profit growth highlights operational improvement.
- Strong 52-week performance shows investor interest.
Industry 🌐
- Industry P/E at 28.7 indicates moderate valuation levels.
- Automotive glass and building materials sector benefits from infrastructure and housing demand.
Conclusion 📝
ASAHIINDIA is a fundamentally weak stock with high debt, low ROE/ROCE, and stretched valuations. While recent profit growth and strong 52-week performance provide positives, long-term investment is risky. Investors should only consider entry near ₹850–₹900 for speculative exposure. Existing holders should look to exit near ₹1,050–₹1,070 resistance levels unless profitability metrics improve significantly.