NAUKRI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.8
| Stock Code | NAUKRI | Market Cap | 76,996 Cr. | Current Price | 1,187 ₹ | High / Low | 1,637 ₹ |
| Stock P/E | 73.5 | Book Value | 694 ₹ | Dividend Yield | 0.51 % | ROCE | 4.91 % |
| ROE | 2.75 % | Face Value | 2.00 ₹ | DMA 50 | 1,317 ₹ | DMA 200 | 1,369 ₹ |
| Chg in FII Hold | -0.67 % | Chg in DII Hold | 0.82 % | PAT Qtr | 297 Cr. | PAT Prev Qtr | 260 Cr. |
| RSI | 29.5 | MACD | -30.2 | Volume | 42,77,131 | Avg Vol 1Wk | 23,34,637 |
| Low price | 1,151 ₹ | High price | 1,637 ₹ | PEG Ratio | 6.15 | Debt to equity | 0.01 |
| 52w Index | 7.36 % | Qtr Profit Var | 359 % | EPS | 83.8 ₹ | Industry PE | 27.9 |
📊 Naukri (Info Edge) shows weak fundamentals for long-term investment at current levels. ROE at 2.75% and ROCE at 4.91% are modest, reflecting poor efficiency. The PEG ratio of 6.15 indicates significant overvaluation relative to growth. The stock trades at a P/E of 73.5, far above the industry average of 27.9, suggesting stretched valuations. Dividend yield at 0.51% is negligible. Current price (1,187 ₹) is below DMA 50 (1,317 ₹) and DMA 200 (1,369 ₹), showing bearish momentum, with RSI at 29.5 indicating oversold conditions. Quarterly PAT improved to 297 Cr. from 260 Cr., but overall profitability remains limited compared to valuation multiples.
💡 Ideal Entry Zone: 1,150 ₹ – 1,200 ₹ (aligned with support levels and oversold RSI).
📈 Exit / Holding Strategy: If already holding, maintain only for short- to medium-term (1–2 years) until ROE improves above 10% and valuations normalize. Consider partial profit booking near 1,500–1,550 ₹ resistance. Long-term holding is risky unless efficiency metrics improve significantly.
Positive
- 📌 EPS at 83.8 ₹ supports earnings visibility.
- 📌 Debt-to-equity ratio of 0.01 highlights a virtually debt-free balance sheet.
- 📌 Quarterly PAT growth of 359% (260 Cr. to 297 Cr.).
- 📌 DII holdings increased (+0.82%), showing domestic investor confidence.
Limitation
- ⚠️ ROE at 2.75% and ROCE at 4.91% are weak.
- ⚠️ PEG ratio of 6.15 indicates overvaluation relative to growth.
- ⚠️ P/E of 73.5 vs industry PE of 27.9 highlights stretched valuations.
- ⚠️ Dividend yield at 0.51% is negligible.
- ⚠️ Current price below DMA 50 and DMA 200 shows bearish momentum.
Company Negative News
- ❌ Decline in FII holdings (-0.67%).
- ❌ Weak technical indicators (MACD -30.2, RSI oversold).
Company Positive News
- ✅ PAT improved quarter-on-quarter (297 Cr. vs 260 Cr.).
- ✅ DII holdings increased (+0.82%).
- ✅ Debt-free structure strengthens financial stability.
Industry
- 💼 Industry PE at 27.9 vs stock PE 73.5 highlights premium valuation.
- 💼 Online recruitment and classifieds sector benefits from digital adoption and employment growth trends.
Conclusion
🔎 Naukri is currently a weak candidate for long-term investment due to poor ROE/ROCE, stretched valuations, and high PEG ratio. Best suited for speculative investors who can accumulate near 1,150–1,200 ₹ and exit near 1,500–1,550 ₹ if momentum sustains. Long-term holding is not advisable unless profitability and efficiency metrics improve significantly.