HSCL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.0
| Stock Code | HSCL | Market Cap | 23,173 Cr. | Current Price | 459 ₹ | High / Low | 534 ₹ |
| Stock P/E | 32.1 | Book Value | 79.2 ₹ | Dividend Yield | 0.13 % | ROCE | 22.6 % |
| ROE | 16.8 % | Face Value | 1.00 ₹ | DMA 50 | 464 ₹ | DMA 200 | 466 ₹ |
| Chg in FII Hold | 0.01 % | Chg in DII Hold | -0.12 % | PAT Qtr | 195 Cr. | PAT Prev Qtr | 187 Cr. |
| RSI | 47.7 | MACD | -3.91 | Volume | 13,73,992 | Avg Vol 1Wk | 16,64,258 |
| Low price | 351 ₹ | High price | 534 ₹ | PEG Ratio | 0.31 | Debt to equity | 0.20 |
| 52w Index | 59.0 % | Qtr Profit Var | 37.1 % | EPS | 14.5 ₹ | Industry PE | 37.8 |
📊 Analysis: HSCL demonstrates solid fundamentals with ROE (16.8%) and ROCE (22.6%), supported by a low debt-to-equity ratio (0.20). Valuations are reasonable with a P/E of 32.1 compared to industry average of 37.8, and a very attractive PEG ratio (0.31) indicating growth is undervalued. Dividend yield (0.13%) is minimal, offering little income support. Current price (₹459) is near both 50 DMA (₹464) and 200 DMA (₹466), showing consolidation. RSI (47.7) suggests neutral conditions, while MACD (-3.91) indicates mild bearish sentiment. The ideal entry zone lies between ₹440–₹455 for long-term investors. If already holding, maintain positions for 3–4 years, leveraging growth potential, but consider partial profit booking near ₹520–₹530 resistance levels.
✅ Positive
- Strong ROCE (22.6%) and ROE (16.8%) highlight efficient capital use.
- Low debt-to-equity ratio (0.20) ensures financial stability.
- Quarterly PAT growth (₹195 Cr vs ₹187 Cr) shows earnings momentum (+37.1%).
- PEG ratio (0.31) signals undervaluation relative to growth potential.
⚠️ Limitation
- Dividend yield (0.13%) is negligible for income-focused investors.
- Stock trading close to DMA levels, showing lack of strong momentum.
- Volume (13.7L) below average weekly volume (16.6L), indicating reduced activity.
📉 Company Negative News
- DII holdings decreased (-0.12%), showing cautious domestic sentiment.
- MACD (-3.91) indicates weak near-term momentum.
📈 Company Positive News
- EPS at ₹14.5 reflects a stable earnings base.
- FII holdings increased slightly (+0.01%), showing foreign confidence.
- Quarterly profit growth highlights operational resilience.
🏭 Industry
- Chemicals sector benefits from rising demand in specialty and industrial applications.
- Industry PE (37.8) is higher than HSCL, making the stock relatively undervalued.
🔎 Conclusion
HSCL is a fundamentally strong company with attractive valuations and growth potential, making it a good candidate for long-term investment. Ideal entry is around ₹440–₹455. Existing holders should maintain positions for 3–4 years, leveraging growth, while booking profits near ₹520–₹530 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (Deepak Nitrite, Aarti Industries, Atul Ltd) so you can compare HSCL’s valuation and profitability against its closest chemical sector peers?