RTNINDIA - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 1.9
| Stock Code | RTNINDIA | Market Cap | 5,269 Cr. | Current Price | 38.1 ₹ | High / Low | 69.7 ₹ |
| Book Value | 8.46 ₹ | Dividend Yield | 0.00 % | ROCE | 10.6 % | ROE | 10.7 % |
| Face Value | 2.00 ₹ | DMA 50 | 42.9 ₹ | DMA 200 | 50.3 ₹ | Chg in FII Hold | 0.22 % |
| Chg in DII Hold | -0.04 % | PAT Qtr | -401 Cr. | PAT Prev Qtr | 514 Cr. | RSI | 30.6 |
| MACD | -1.15 | Volume | 9,41,724 | Avg Vol 1Wk | 12,17,111 | Low price | 37.4 ₹ |
| High price | 69.7 ₹ | Debt to equity | 0.56 | 52w Index | 2.07 % | Qtr Profit Var | -63.8 % |
| EPS | -2.88 ₹ | Industry PE | 56.3 |
📊 RTNINDIA shows weak fundamentals for long-term investment. The company reported a quarterly loss (-401 Cr. vs +514 Cr. previous), with EPS at -2.88 ₹, indicating negative earnings. ROE (10.7%) and ROCE (10.6%) are modest but overshadowed by poor profitability. Dividend yield is 0.00%, offering no income support. Valuation metrics like P/E and PEG are not meaningful due to losses. Technicals are weak with RSI at 30.6 (oversold zone) and MACD negative (-1.15), suggesting bearish sentiment. Debt-to-equity at 0.56 is moderate but adds risk given inconsistent earnings.
💡 Ideal Entry Zone: 35 ₹ – 38 ₹ (near support levels and 52-week low). Current price (38.1 ₹) is close to support, but entry is risky given negative earnings.
📈 Exit Strategy: If already holding, consider reducing exposure near 42–45 ₹ (DMA 50 resistance zone). Long-term holding is not recommended unless profitability stabilizes. Holding period should be short-term only, with strict stop-loss near 35 ₹.
Positive
- 📌 Efficiency: ROE (10.7%) and ROCE (10.6%) show moderate capital efficiency despite losses.
- 📌 Balance Sheet: Debt-to-equity at 0.56 is manageable compared to highly leveraged peers.
- 📌 Institutional Support: FII holdings increased slightly (+0.22%).
Limitation
- ⚠️ Profitability: Quarterly PAT collapsed (-401 Cr. vs +514 Cr.).
- ⚠️ Valuation: P/E and PEG not meaningful due to negative earnings.
- ⚠️ Dividend Yield: 0.00%, unattractive for income investors.
- ⚠️ Technical: RSI at 30.6 and MACD negative (-1.15) show weak momentum.
Company Negative News
- 📉 Collapse in quarterly profitability (-63.8% variation).
- 📉 EPS negative (-2.88 ₹), limiting valuation reliability.
- 📉 DII holdings reduced (-0.04%), showing weaker domestic confidence.
Company Positive News
- ✅ FII holdings increased slightly (+0.22%), showing marginal foreign interest.
- ✅ ROE and ROCE remain positive despite losses, indicating some operational efficiency.
Industry
- ⚡ Power and infrastructure sector benefits from government initiatives but remains cyclical and capital-intensive.
- ⚡ Industry PE at 56.3 shows sector valuations are high, but RTNINDIA’s losses make comparison unreliable.
Conclusion
🔎 RTNINDIA is not a strong candidate for long-term investment due to negative earnings, weak profitability, and lack of dividend support. Ideal entry is near 35–38 ₹ only for speculative short-term opportunities. Investors already holding should consider profit booking near resistance levels and avoid long-term exposure unless earnings stabilize significantly.
Would you like me to also prepare a peer benchmarking overlay comparing RTNINDIA with other power/infrastructure companies like Adani Transmission and Tata Power to highlight relative strengths and safer long-term opportunities?