BLUEJET - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.6
| Stock Code | BLUEJET | Market Cap | 7,129 Cr. | Current Price | 413 ₹ | High / Low | 1,028 ₹ |
| Stock P/E | 20.2 | Book Value | 72.4 ₹ | Dividend Yield | 0.29 % | ROCE | 39.8 % |
| ROE | 30.2 % | Face Value | 2.00 ₹ | DMA 50 | 503 ₹ | DMA 200 | 622 ₹ |
| Chg in FII Hold | -0.69 % | Chg in DII Hold | 1.02 % | PAT Qtr | 52.1 Cr. | PAT Prev Qtr | 91.2 Cr. |
| RSI | 27.4 | MACD | -31.4 | Volume | 3,17,531 | Avg Vol 1Wk | 3,53,472 |
| Low price | 392 ₹ | High price | 1,028 ₹ | PEG Ratio | 1.12 | Debt to equity | 0.02 |
| 52w Index | 3.29 % | Qtr Profit Var | -10.6 % | EPS | 20.3 ₹ | Industry PE | 29.1 |
🔍 Analysis: BlueJet demonstrates strong efficiency metrics with ROCE at 39.8% and ROE at 30.2%, supported by EPS of 20.3 ₹. Debt-to-equity is very low (0.02), reflecting a solid balance sheet. Valuation is reasonable with a P/E of 20.2 compared to the industry average of 29.1, offering comfort. However, quarterly PAT declined (52.1 Cr vs 91.2 Cr), and RSI at 27.4 indicates oversold conditions, reflecting short-term weakness. PEG ratio of 1.12 suggests fair valuation relative to growth. Current price (413 ₹) is far below DMA supports (50 DMA at 503 ₹, 200 DMA at 622 ₹), showing bearish momentum but accumulation potential.
💡 Entry Zone: Ideal entry would be in the 390–420 ₹ range, aligning with oversold RSI and near the 52-week low (392 ₹). Accumulation at these levels offers margin of safety.
📈 Exit / Holding Strategy: If already holding, maintain position for 2–4 years given strong ROE/ROCE and low leverage. Consider partial exit near 950–1,000 ₹ resistance if valuations stretch without earnings support. Long-term investors should monitor profit consistency and PEG ratio alignment.
🌟 Positive
- Strong ROCE (39.8%) and ROE (30.2%)
- EPS at 20.3 ₹ supports earnings strength
- Low debt-to-equity (0.02), excellent balance sheet
- Valuation comfort (P/E 20.2 vs industry 29.1)
- DII holdings increased (+1.02%)
⚠️ Limitation
- Quarterly PAT declined (52.1 Cr vs 91.2 Cr)
- Dividend yield modest (0.29%)
- RSI at 27.4 indicates oversold, weak momentum
- Stock trading below DMA supports (503 ₹, 622 ₹)
📉 Company Negative News
- Quarterly profit decline (-10.6%)
- FII holdings reduced (-0.69%)
📈 Company Positive News
- Strong efficiency metrics (ROE, ROCE)
- DII stake increased (+1.02%)
- Valuation below industry average, offering comfort
🏭 Industry
- Industry PE at 29.1, higher than BlueJet’s valuation
- Aviation sector benefits from rising travel demand but faces cyclical risks
✅ Conclusion
BlueJet is a moderate candidate for long-term investment. Strong ROE, ROCE, and low debt support fundamentals, but profit decline and weak momentum limit rating. Ideal entry is near 390–420 ₹ for margin of safety. Existing holders should maintain for 2–4 years, with partial exit near 950–1,000 ₹ resistance if valuations outpace earnings growth.