INOXINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.2
| Stock Code | INOXINDIA | Market Cap | 10,249 Cr. | Current Price | 1,130 ₹ | High / Low | 1,289 ₹ |
| Stock P/E | 43.7 | Book Value | 111 ₹ | Dividend Yield | 0.18 % | ROCE | 37.0 % |
| ROE | 27.9 % | Face Value | 2.00 ₹ | DMA 50 | 1,130 ₹ | DMA 200 | 1,144 ₹ |
| Chg in FII Hold | 0.02 % | Chg in DII Hold | 0.57 % | PAT Qtr | 57.1 Cr. | PAT Prev Qtr | 60.4 Cr. |
| RSI | 53.5 | MACD | -3.78 | Volume | 38,898 | Avg Vol 1Wk | 60,223 |
| Low price | 885 ₹ | High price | 1,289 ₹ | PEG Ratio | 2.18 | Debt to equity | 0.10 |
| 52w Index | 60.7 % | Qtr Profit Var | 15.5 % | EPS | 26.6 ₹ | Industry PE | 26.1 |
📊 INOX India demonstrates strong fundamentals for long-term investment. ROCE at 37.0% and ROE at 27.9% are excellent, reflecting efficient capital usage and strong shareholder returns. Debt-to-equity at 0.10 indicates a very low leverage profile. However, the PEG ratio of 2.18 and P/E of 43.7 (vs industry PE of 26.1) suggest overvaluation. Current price (1,130 ₹) is aligned with DMA 50 (1,130 ₹) and slightly below DMA 200 (1,144 ₹), showing consolidation near support levels. Dividend yield is low at 0.18%, but growth metrics outweigh income concerns.
💡 Ideal Entry Zone: 1,080 ₹ – 1,130 ₹ (aligned with DMA support and consolidation zone).
📈 Exit / Holding Strategy: If already holding, maintain for 3–5 years given strong ROE/ROCE and low debt. Consider partial profit booking near 1,280–1,300 ₹ resistance. Long-term holding is justified if earnings growth sustains and valuations normalize.
Positive
- 📌 ROCE at 37.0% and ROE at 27.9% are excellent.
- 📌 Debt-to-equity ratio of 0.10 shows strong balance sheet.
- 📌 EPS at 26.6 ₹ supports earnings strength.
- 📌 Marginal increase in both FII and DII holdings.
Limitation
- ⚠️ PEG ratio of 2.18 indicates overvaluation relative to growth.
- ⚠️ P/E of 43.7 vs industry PE of 26.1 highlights stretched valuations.
- ⚠️ Dividend yield at 0.18% is negligible.
- ⚠️ PAT declined slightly from 60.4 Cr. to 57.1 Cr.
Company Negative News
- ❌ Marginal decline in quarterly PAT.
- ❌ High valuation multiples compared to industry peers.
Company Positive News
- ✅ Strong ROE and ROCE metrics.
- ✅ EPS growth supports long-term earnings visibility.
- ✅ Institutional investors (FII/DII) increased holdings.
Industry
- 🏭 Industry PE at 26.1 vs stock PE 43.7 highlights premium valuation.
- 🏭 Industrial gas and cryogenic equipment sector benefits from infrastructure and energy demand growth.
Conclusion
🔎 INOX India is fundamentally strong with excellent ROE/ROCE and low debt, making it a good candidate for long-term investment. Valuations are stretched, so accumulation near 1,080–1,130 ₹ is ideal. Hold for 3–5 years with partial profit booking near 1,280–1,300 ₹ resistance, while monitoring earnings growth and valuation normalization.