ONESOURCE - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.1
| Stock Code | ONESOURCE | Market Cap | 13,593 Cr. | Current Price | 1,178 ₹ | High / Low | 2,250 ₹ |
| Stock P/E | 74.8 | Book Value | 522 ₹ | Dividend Yield | 0.00 % | ROCE | 6.42 % |
| ROE | 4.14 % | Face Value | 1.00 ₹ | DMA 50 | 1,582 ₹ | DMA 200 | 1,720 ₹ |
| Chg in FII Hold | -0.15 % | Chg in DII Hold | 0.32 % | PAT Qtr | -55.1 Cr. | PAT Prev Qtr | 37.1 Cr. |
| RSI | 23.5 | MACD | -153 | Volume | 3,99,548 | Avg Vol 1Wk | 7,09,827 |
| Low price | 1,057 ₹ | High price | 2,250 ₹ | PEG Ratio | 2.02 | Debt to equity | 0.22 |
| 52w Index | 10.1 % | Qtr Profit Var | -300 % | EPS | 15.2 ₹ | Industry PE | 29.2 |
📊 Analysis: Onesource trades at ₹1,178 with a very high P/E of 74.8 compared to the industry average of 29.2, indicating steep overvaluation. Fundamentals are weak with ROE at 4.14% and ROCE at 6.42%, showing poor capital efficiency. Dividend yield is 0%, offering no income support. Quarterly PAT turned negative (-₹55.1 Cr. vs ₹37.1 Cr. previous), highlighting earnings volatility. EPS is ₹15.2, but PEG ratio of 2.02 suggests expensive valuation relative to growth. Technicals are bearish (RSI 23.5, MACD -153, trading below DMA 50 & 200). Overall, the stock is not a strong candidate for long-term investment unless profitability stabilizes.
💡 Entry Price Zone: Ideal accumulation range is ₹1,050–₹1,100, closer to the 52-week low (₹1,057) and below current levels. Current price is above fair value zone, making fresh entry unattractive.
📈 Exit / Holding Strategy: If already holding, consider exiting on rallies near ₹1,400–₹1,500. Long-term holding is not advisable unless ROE/ROCE improve significantly and earnings turn positive. Investors should monitor quarterly profitability trends before committing to long-term exposure.
Positive
- EPS of ₹15.2 provides some earnings base.
- Debt-to-equity ratio of 0.22 indicates manageable leverage.
- DII holdings increased (+0.32%), showing domestic institutional support.
Limitation
- High P/E (74.8) compared to industry average (29.2), indicating overvaluation.
- Weak ROE (4.14%) and ROCE (6.42%) show poor efficiency.
- No dividend yield, limiting investor returns.
- Negative quarterly PAT (-₹55.1 Cr.) highlights earnings volatility.
- Bearish technicals: RSI 23.5 and MACD -153.
Company Negative News
- Quarterly PAT turned negative, dropping sharply from ₹37.1 Cr. to -₹55.1 Cr.
- FII holdings reduced (-0.15%), showing declining foreign investor confidence.
Company Positive News
- DII holdings increased (+0.32%), reflecting domestic institutional support.
- EPS remains positive despite recent losses, at ₹15.2.
Industry
- Industry PE at 29.2, much lower than Onesource’s valuation, suggesting peers may offer better value.
- Sector growth potential exists, but profitability and valuation risks remain high.
Conclusion
⚠️ Onesource is currently overvalued with weak fundamentals and negative profitability. Ideal entry is ₹1,050–₹1,100. Long-term investors should avoid until ROE/ROCE improve and earnings stabilize. Existing holders may exit near ₹1,400–₹1,500 on rallies rather than holding for compounding.