SWANCORP - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 1.8
| Stock Code | SWANCORP | Market Cap | 13,429 Cr. | Current Price | 428 ₹ | High / Low | 557 ₹ |
| Stock P/E | 749 | Book Value | 146 ₹ | Dividend Yield | 0.02 % | ROCE | 0.12 % |
| ROE | 0.07 % | Face Value | 1.00 ₹ | DMA 50 | 438 ₹ | DMA 200 | 461 ₹ |
| Chg in FII Hold | 0.81 % | Chg in DII Hold | -0.08 % | PAT Qtr | 5.61 Cr. | PAT Prev Qtr | 7.72 Cr. |
| RSI | 48.0 | MACD | -8.62 | Volume | 5,25,344 | Avg Vol 1Wk | 6,58,976 |
| Low price | 362 ₹ | High price | 557 ₹ | PEG Ratio | -585 | Debt to equity | 0.08 |
| 52w Index | 33.6 % | Qtr Profit Var | 360 % | EPS | 0.57 ₹ | Industry PE | 17.8 |
📊 Analysis: SWANCORP shows extremely weak fundamentals with ROE at 0.07% and ROCE at 0.12%, far below compounding benchmarks. The P/E of 749 compared to industry average of 17.8 indicates severe overvaluation. EPS of 0.57 ₹ is very low relative to price, and dividend yield of 0.02% offers negligible passive returns. PEG ratio of -585 highlights negative growth prospects. Technical support lies around 360–400 ₹, with resistance near 450–460 ₹ (DMA levels). The ideal entry zone would only be near 350–370 ₹ for speculative traders, but long-term investors should avoid fresh entry. For existing holders, exit on any rally near 450–500 ₹ is advisable, as fundamentals do not support long-term compounding.
✅ Positive
- Market cap of 13,429 Cr. provides some stability.
- Debt-to-equity ratio of 0.08 indicates low leverage.
- FII holdings increased by 0.81%, showing marginal foreign interest.
- Quarterly profit variation (+360%) shows short-term recovery momentum.
⚠️ Limitation
- Extremely high P/E (749) compared to industry average (17.8).
- ROE (0.07%) and ROCE (0.12%) are critically low.
- Dividend yield of 0.02% is negligible.
- Negative PEG ratio (-585) highlights poor growth prospects.
- Weak EPS (0.57 ₹) relative to valuation.
📉 Company Negative News
- Sequential decline in quarterly PAT (5.61 Cr. vs 7.72 Cr.).
- MACD at -8.62 indicates bearish sentiment.
- Stock trading at only 33.6% of 52-week index range, reflecting weak momentum.
📈 Company Positive News
- Quarterly profit variation (+360%) shows temporary earnings improvement.
- Marginal increase in foreign institutional participation.
🏭 Industry
- Industry P/E at 17.8 suggests SWANCORP trades at an extreme premium.
- Sector growth depends on cyclical demand and operational efficiency.
🔎 Conclusion
SWANCORP earns a rating of 1.8 due to extremely weak ROE/ROCE, unsustainable valuation, and negligible dividend yield. Long-term investors should avoid fresh entry, as fundamentals do not support compounding. Current holders should consider exiting near 450–500 ₹ resistance levels. The stock remains highly speculative and unsuitable for long-term investment.