SCI - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.2
| Stock Code | SCI | Market Cap | 10,302 Cr. | Current Price | 222 ₹ | High / Low | 280 ₹ |
| Stock P/E | 13.6 | Book Value | 171 ₹ | Dividend Yield | 2.98 % | ROCE | 10.1 % |
| ROE | 11.0 % | Face Value | 10.0 ₹ | DMA 50 | 222 ₹ | DMA 200 | 220 ₹ |
| Chg in FII Hold | 0.64 % | Chg in DII Hold | -0.17 % | PAT Qtr | 176 Cr. | PAT Prev Qtr | 343 Cr. |
| RSI | 52.7 | MACD | -1.41 | Volume | 17,08,549 | Avg Vol 1Wk | 38,05,517 |
| Low price | 138 ₹ | High price | 280 ₹ | PEG Ratio | 16.2 | Debt to equity | 0.35 |
| 52w Index | 58.6 % | Qtr Profit Var | -39.4 % | EPS | 16.2 ₹ | Industry PE | 12.7 |
📊 Analysis: Shipping Corporation of India (SCI) trades at a fair valuation with a P/E of 13.6, close to the industry average of 12.7. Dividend yield of 2.98% adds income appeal. ROE (11.0%) and ROCE (10.1%) are moderate, showing average capital efficiency. Debt-to-equity ratio of 0.35 is manageable. However, quarterly PAT declined sharply (343 Cr. → 176 Cr.), and PEG ratio of 16.2 indicates expensive valuation relative to growth. Technically, the stock is trading near DMA 50 (222 ₹) and DMA 200 (220 ₹), with RSI at 52.7 showing neutral momentum, while MACD (-1.41) suggests weak short-term trend.
💰 Ideal Entry Zone: 200 ₹ – 215 ₹ (near DMA support and valuation comfort). Current price (222 ₹) is slightly above this zone, so accumulation on dips is preferable.
📈 Exit / Holding Strategy:
- If already holding, maintain a medium-term horizon (2–3 years) for dividend yield and potential sectoral recovery.
- Exit strategy: Consider partial profit booking if price approaches 260–270 ₹ (resistance zone).
- Long-term holding is not ideal unless ROE improves above 12–13% and earnings growth stabilizes.
✅ Positive
- Fair valuation (P/E 13.6 vs industry 12.7).
- Attractive dividend yield (2.98%).
- Debt-to-equity ratio of 0.35, manageable leverage.
- EPS of 16.2 ₹ supports earnings visibility.
- FII holdings increased (+0.64%).
⚠️ Limitation
- Weak ROE (11.0%) and ROCE (10.1%).
- PEG ratio of 16.2 indicates expensive valuation relative to growth.
- Quarterly PAT declined significantly (-39.4%).
- DII holdings decreased (-0.17%).
📉 Company Negative News
- Sharp decline in quarterly profits (343 Cr. → 176 Cr.).
- MACD negative (-1.41), showing weak short-term momentum.
- Stock trading well below 52-week high (280 ₹).
📈 Company Positive News
- Dividend yield of 2.98% provides steady income.
- FII holdings increased, signaling foreign investor confidence.
- Stock trading near DMA support levels, offering accumulation opportunity.
🏦 Industry
- Industry PE at 12.7, close to SCI’s valuation, suggesting fair pricing.
- Shipping and logistics sector benefits from global trade recovery and infrastructure push.
🔎 Conclusion
SCI offers fair valuation and attractive dividend yield but suffers from weak growth metrics and declining profits. Best suited for medium-term investors seeking dividend income. Accumulate near 200–215 ₹ and exit around 260–270 ₹ unless profitability improves significantly.