CARBORUNIV - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.4
| Stock Code | CARBORUNIV | Market Cap | 15,267 Cr. | Current Price | 802 ₹ | High / Low | 1,132 ₹ |
| Stock P/E | 43.0 | Book Value | 143 ₹ | Dividend Yield | 0.50 % | ROCE | 17.6 % |
| ROE | 13.3 % | Face Value | 1.00 ₹ | DMA 50 | 833 ₹ | DMA 200 | 933 ₹ |
| Chg in FII Hold | 0.11 % | Chg in DII Hold | 0.19 % | PAT Qtr | 84.5 Cr. | PAT Prev Qtr | 64.3 Cr. |
| RSI | 47.3 | MACD | -13.9 | Volume | 1,09,916 | Avg Vol 1Wk | 3,54,979 |
| Low price | 748 ₹ | High price | 1,132 ₹ | PEG Ratio | 5.22 | Debt to equity | 0.00 |
| 52w Index | 14.0 % | Qtr Profit Var | 4.93 % | EPS | 18.6 ₹ | Industry PE | 54.0 |
📊 Analysis: CARBORUNIV trades at a P/E of 43, which is high but still below the industry average of 54, suggesting relative valuation comfort. ROE (13.3%) and ROCE (17.6%) are moderate, showing decent efficiency but not exceptional. EPS of 18.6 ₹ is fair, while PEG ratio of 5.22 indicates overvaluation relative to growth. Dividend yield is low at 0.50%. Debt-to-equity is 0.00, reflecting a debt-free balance sheet. Technicals show price below DMA 50 (833 ₹) and DMA 200 (933 ₹), with RSI at 47.3 and MACD negative (-13.9), pointing to weak momentum. Quarterly PAT growth (4.93%) is modest, though sequential improvement is visible (84.5 Cr. vs 64.3 Cr.).
💰 Ideal Entry Zone: Between 760 ₹ – 790 ₹ (near support levels and valuation comfort). Current price (802 ₹) is slightly above ideal entry, so staggered accumulation is recommended.
📈 Exit / Holding Strategy: For long-term investors already holding, maintain positions cautiously given debt-free status and moderate ROE/ROCE. Exit if price sustains below 748 ₹ (recent low) or if earnings growth stagnates further. Holding period: 2–3 years, with periodic review of valuation multiples and profit growth.
Positive
- Debt-free balance sheet (Debt-to-equity 0.00)
- ROCE (17.6%) and ROE (13.3%) show moderate efficiency
- EPS of 18.6 ₹ supports profitability
- Sequential PAT growth (84.5 Cr. vs 64.3 Cr.)
- FII (+0.11%) and DII (+0.19%) holdings increased slightly
Limitation
- High PEG ratio (5.22) indicates overvaluation relative to growth
- P/E of 43 is expensive despite being below industry average
- Dividend yield of 0.50% is low
- Price below DMA 50 and DMA 200 reflects weak technical trend
- Trading volume significantly below 1-week average
Company Negative News
- Quarterly profit variation only 4.93%, showing limited growth momentum
- Weak technical indicators (MACD -13.9, RSI 47.3)
Company Positive News
- Sequential PAT improvement indicates operational recovery
- Institutional investors (FII & DII) marginally increased holdings
Industry
- Industry P/E at 54 shows sector trades at premium valuations
- CARBORUNIV trades at discount to industry but still expensive relative to growth
Conclusion
⚖️ CARBORUNIV is a moderately efficient, debt-free company but currently overvalued relative to growth. Ideal entry is near 760–790 ₹. Long-term holders should maintain positions for 2–3 years, monitoring earnings growth and valuation multiples. Caution is advised due to weak technical momentum and high PEG ratio.