FIVESTAR - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | FIVESTAR | Market Cap | 13,554 Cr. | Current Price | 460 ₹ | High / Low | 850 ₹ |
| Stock P/E | 12.2 | Book Value | 231 ₹ | Dividend Yield | 0.43 % | ROCE | 16.3 % |
| ROE | 18.6 % | Face Value | 1.00 ₹ | DMA 50 | 526 ₹ | DMA 200 | 599 ₹ |
| Chg in FII Hold | -2.85 % | Chg in DII Hold | 2.58 % | PAT Qtr | 277 Cr. | PAT Prev Qtr | 286 Cr. |
| RSI | 34.4 | MACD | -25.4 | Volume | 12,71,331 | Avg Vol 1Wk | 40,89,739 |
| Low price | 420 ₹ | High price | 850 ₹ | PEG Ratio | 0.37 | Debt to equity | 1.23 |
| 52w Index | 9.19 % | Qtr Profit Var | 1.16 % | EPS | 37.6 ₹ | Industry PE | 18.9 |
📊 Analysis: FIVESTAR shows strong fundamentals for long-term investment. ROE (18.6%) and ROCE (16.3%) highlight efficient capital usage and profitability. EPS of 37.6 ₹ is solid, and P/E ratio (12.2) is below the industry average (18.9), suggesting undervaluation. Dividend yield of 0.43% provides minor shareholder returns. PEG ratio of 0.37 indicates growth is attractively priced. Debt-to-equity at 1.23 reflects moderate leverage, typical for NBFCs. Technically, the stock is trading below DMA 50 (526 ₹) and DMA 200 (599 ₹), with RSI at 34.4 (oversold) and MACD negative, suggesting near-term weakness but long-term accumulation potential.
💰 Ideal Entry Zone: 440 ₹ – 470 ₹ (near support levels and oversold RSI, offering margin of safety).
📈 Exit / Holding Strategy: For long-term investors, holding is recommended given strong ROE, undervaluation, and growth visibility. If already holding, maintain positions with a 3–5 year horizon. Exit strategy: consider partial profit booking near 800–850 ₹ (52-week high zone) if valuations stretch, while retaining core holdings for compounding growth.
Positive
- Strong ROE (18.6%) and ROCE (16.3%) indicate efficient capital deployment.
- P/E ratio (12.2) below industry average (18.9), suggesting undervaluation.
- PEG ratio of 0.37 highlights attractively priced growth.
- DII holdings increased (+2.58%), showing strong domestic institutional support.
Limitation
- Debt-to-equity ratio of 1.23 indicates moderate leverage.
- Dividend yield of 0.43% offers limited shareholder returns.
- Stock trading below DMA 50 & 200, showing weak near-term momentum.
Company Negative News
- Decline in FII holdings (-2.85%), showing reduced foreign investor confidence.
- Quarterly PAT slightly lower (277 Cr. vs 286 Cr.), reflecting earnings pressure.
Company Positive News
- Quarterly profit variation +1.16%, showing stable earnings.
- DII holdings increased, reflecting domestic institutional confidence.
Industry
- Industry PE at 18.9, higher than company’s valuation, suggesting FIVESTAR trades at a discount.
- NBFC sector benefits from rising credit demand in retail and SME segments.
Conclusion
✅ FIVESTAR is a good candidate for long-term investment, supported by strong ROE, undervaluation, and growth visibility. Ideal entry zone is 440–470 ₹ for margin of safety. Investors should hold for 3–5 years to benefit from compounding growth, with partial exits near 800–850 ₹ if valuations peak.
Selva, would you like me to extend this into a peer benchmarking overlay with NBFC peers (like Manappuram Finance, Muthoot Finance, Bajaj Finance) so you can compare relative strength and margin-of-safety positioning for your basket rotation strategy?