GODIGIT - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.7
| Stock Code | GODIGIT | Market Cap | 29,230 Cr. | Current Price | 316 ₹ | High / Low | 381 ₹ |
| Stock P/E | 57.2 | Book Value | 0.00 ₹ | Dividend Yield | 0.00 % | ROCE | 10.8 % |
| ROE | 11.9 % | Face Value | 10.0 ₹ | DMA 50 | 337 ₹ | DMA 200 | 341 ₹ |
| Chg in FII Hold | -0.22 % | Chg in DII Hold | 0.22 % | PAT Qtr | 140 Cr. | PAT Prev Qtr | 117 Cr. |
| RSI | 34.8 | MACD | -5.56 | Volume | 2,07,500 | Avg Vol 1Wk | 3,35,316 |
| Low price | 265 ₹ | High price | 381 ₹ | PEG Ratio | 1.13 | 52w Index | 44.0 % |
| Qtr Profit Var | 18.2 % | EPS | 5.53 ₹ | Industry PE | 33.8 |
📊 Analysis: GoDigit trades at a premium valuation with a P/E of 57.2 compared to the industry PE of 33.8. ROCE (10.8%) and ROE (11.9%) are modest, showing average efficiency. EPS of 5.53 ₹ is relatively low, and dividend yield is 0%, making it purely a growth-oriented play. The PEG ratio of 1.13 suggests fair valuation relative to earnings growth. Quarterly PAT growth (18.2%) is encouraging, but technical indicators (RSI 34.8, MACD -5.56) show weakness and oversold conditions. Current price (316 ₹) is below DMA 50 (337 ₹) and DMA 200 (341 ₹), indicating bearish momentum.
💰 Entry Price Zone: Ideal accumulation range is 290 ₹ – 310 ₹, closer to support levels and below DMA averages for margin of safety. Current price is near this zone, making staggered buying suitable for risk-tolerant investors.
📈 Exit / Holding Strategy: For existing holders, maintain positions with a medium-term horizon (2–3 years). Partial profit booking can be considered near 370 ₹ – 380 ₹ (recent highs). Long-term holding beyond 3 years requires improvement in ROE/ROCE and consistent earnings growth. Dividend yield is absent, so focus remains entirely on capital appreciation.
✅ Positive
- Quarterly PAT growth of 18.2% (140 Cr. vs 117 Cr.)
- DII holdings increased (+0.22%)
- PEG ratio of 1.13 indicates fair valuation relative to growth
- RSI at 34.8 suggests oversold levels, potential rebound
⚠️ Limitation
- High P/E of 57.2 vs industry PE of 33.8
- Low ROE (11.9%) and ROCE (10.8%)
- No dividend yield (0%)
- EPS of 5.53 ₹ is modest relative to valuation
📉 Company Negative News
- Decline in FII holdings (-0.22%)
- Stock trading below DMA 50 and DMA 200, showing bearish trend
- MACD negative (-5.56), indicating weak momentum
📈 Company Positive News
- Quarterly profit growth of 18.2%
- DII confidence increased (+0.22%)
- RSI oversold zone may trigger technical bounce
🏭 Industry
- Insurance sector enjoys long-term demand stability
- Industry PE at 33.8 highlights investor optimism
- Sector rotation favors financial and insurance services
🔎 Conclusion
GoDigit is a growth-oriented insurance stock with modest efficiency ratios and premium valuations. While short-term technicals show weakness, oversold conditions may offer entry opportunities. Ideal strategy: accumulate near 290–310 ₹, hold for 2–3 years, and book partial profits near highs (370–380 ₹). Long-term compounding potential depends on improvement in profitability and sustained earnings growth.