SUNDARMFIN - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.8
| Stock Code | SUNDARMFIN | Market Cap | 60,019 Cr. | Current Price | 5,404 ₹ | High / Low | 5,454 ₹ |
| Stock P/E | 32.9 | Book Value | 1,162 ₹ | Dividend Yield | 0.65 % | ROCE | 9.71 % |
| ROE | 14.7 % | Face Value | 10.0 ₹ | DMA 50 | 5,058 ₹ | DMA 200 | 4,834 ₹ |
| Chg in FII Hold | 0.07 % | Chg in DII Hold | 0.06 % | PAT Qtr | 453 Cr. | PAT Prev Qtr | 394 Cr. |
| RSI | 60.1 | MACD | 67.8 | Volume | 96,746 | Avg Vol 1Wk | 95,773 |
| Low price | 4,200 ₹ | High price | 5,454 ₹ | PEG Ratio | 1.72 | Debt to equity | 4.00 |
| 52w Index | 96.0 % | Qtr Profit Var | 29.7 % | EPS | 159 ₹ | Industry PE | 18.9 |
📊 Analysis: SUNDARMFIN shows moderate fundamentals with ROE at 14.7% and ROCE at 9.71%, which are acceptable but not exceptional for long-term compounding. The P/E of 32.9 is significantly higher than the industry average of 18.9, suggesting overvaluation. PEG ratio of 1.72 indicates growth is priced at a premium. Dividend yield of 0.65% is modest. Debt-to-equity ratio of 4.00 highlights high leverage, typical of NBFCs. Technical support lies around 4,800–5,000 ₹ (DMA 200 & 50), with resistance near 5,450 ₹. The ideal entry zone is 4,700–5,000 ₹ for margin of safety. For existing holders, a medium-to-long horizon is viable, but partial profit booking near 5,400–5,450 ₹ resistance is advisable unless ROE improves further.
✅ Positive
- Large market cap of 60,019 Cr. ensures financial stability.
- ROE of 14.7% supports moderate long-term compounding.
- Quarterly PAT growth (453 Cr. vs 394 Cr.) shows operational improvement.
- FII and DII holdings both increased slightly, reflecting institutional confidence.
- EPS of 159 ₹ provides valuation support.
⚠️ Limitation
- High P/E (32.9) compared to industry average (18.9).
- ROCE at 9.71% is relatively weak.
- Dividend yield of 0.65% is modest.
- Debt-to-equity ratio of 4.00 highlights leverage risk.
📉 Company Negative News
- High leverage structure may limit flexibility in downturns.
- Valuation premium compared to peers could cap upside.
📈 Company Positive News
- Quarterly PAT growth of 29.7% indicates strong earnings momentum.
- Institutional investors (FII & DII) marginally increased holdings.
- Stock trading near 52-week high (96% of range), reflecting investor optimism.
🏭 Industry
- NBFC sector benefits from rising credit demand and financial inclusion.
- Industry P/E at 18.9 suggests SUNDARMFIN trades at a premium.
- Structural drivers: retail lending growth, vehicle financing, and digital adoption.
🔎 Conclusion
SUNDARMFIN earns a rating of 3.8 due to moderate ROE, strong EPS, and earnings momentum but faces valuation and leverage risks. Long-term investors should consider entry in the 4,700–5,000 ₹ zone for margin of safety. Current holders may adopt a medium-to-long horizon, with partial profit booking near 5,400–5,450 ₹ resistance unless return ratios improve. The stock remains a stable NBFC play but requires caution due to high leverage and premium valuation.