CREDITACC - Investment Analysis: Buy Signal or Bull Trap?
Last Updated Time : 20 Dec 25, 07:05 am
Back to Investment ListInvestment Rating: 2.4
| Stock Code | CREDITACC | Market Cap | 20,523 Cr. | Current Price | 1,283 ₹ | High / Low | 1,490 ₹ |
| Stock P/E | 153 | Book Value | 448 ₹ | Dividend Yield | 0.00 % | ROCE | 9.55 % |
| ROE | 7.86 % | Face Value | 10.0 ₹ | DMA 50 | 1,330 ₹ | DMA 200 | 1,266 ₹ |
| Chg in FII Hold | 0.16 % | Chg in DII Hold | 0.57 % | PAT Qtr | 126 Cr. | PAT Prev Qtr | 60.2 Cr. |
| RSI | 40.2 | MACD | -25.9 | Volume | 54,831 | Avg Vol 1Wk | 1,53,445 |
| Low price | 750 ₹ | High price | 1,490 ₹ | PEG Ratio | 10.5 | Debt to equity | 2.81 |
| 52w Index | 72.0 % | Qtr Profit Var | -32.4 % | EPS | 8.36 ₹ | Industry PE | 80.3 |
📊 Analysis: CREDITACC shows stretched valuations with a P/E of 153 compared to industry average of 80.3. ROE (7.86%) and ROCE (9.55%) are below ideal compounding levels, while PEG ratio (10.5) signals poor growth-adjusted valuation. Debt-to-equity at 2.81 adds leverage risk. Dividend yield is 0%, limiting investor returns. Technicals show RSI at 40.2 (weak momentum), MACD negative (-25.9), and price hovering near 200 DMA (1,266 ₹), suggesting cautious sentiment.
💡 Entry Zone: Safer entry would be in the 950–1,050 ₹ range, aligning with valuation comfort and long-term support zones. Current price (1,283 ₹) is above fair value, making risk-reward unattractive.
📈 Exit Strategy: If already holding, consider partial exit near 1,350–1,400 ₹ resistance. Long-term holding is not favorable unless ROE improves above 15% and debt reduces. Suggested holding period: tactical 6–12 months, not multi-year, given weak compounding metrics.
Positive
- 📌 Quarterly PAT recovery: 126 Cr. vs 60.2 Cr. previous quarter
- 📌 Institutional interest: FII (+0.16%) and DII (+0.57%) holdings increased
- 📌 Technical support: Price near 200 DMA (1,266 ₹)
Limitation
- ⚠️ High valuation: P/E 153 vs industry 80.3
- ⚠️ Weak profitability: ROE 7.86%, ROCE 9.55%
- ⚠️ High leverage: Debt-to-equity 2.81
- ⚠️ No dividend yield: 0% payout
Company Negative News
- ❌ Quarterly profit variance: -32.4% decline
- ❌ EPS remains low: 8.36 ₹ despite high market cap
Company Positive News
- ✅ Strong PAT rebound in latest quarter
- ✅ Incremental institutional confidence with FII/DII buying
Industry
- 🏦 Industry PE: 80.3, indicating sector is richly valued
- 🏦 Credit sector demand strong but profitability pressures persist
Conclusion
🔎 CREDITACC is currently overvalued with weak long-term metrics. Entry should be avoided at current levels; wait for correction near 950–1,050 ₹. Existing holders may exit near resistance zones or hold short-term only. Long-term compounding potential is limited unless ROE and ROCE improve significantly.
Would you like me to extend this into a peer benchmarking overlay comparing CREDITACC against other NBFCs (like Bajaj Finance, Muthoot, Shriram Finance) to highlight relative margin-of-safety entry zones?
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