TARIL - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.9
| Stock Code | TARIL | Market Cap | 7,648 Cr. | Current Price | 256 ₹ | High / Low | 595 ₹ |
| Stock P/E | 34.4 | Book Value | 42.8 ₹ | Dividend Yield | 0.08 % | ROCE | 24.6 % |
| ROE | 20.0 % | Face Value | 1.00 ₹ | DMA 50 | 284 ₹ | DMA 200 | 384 ₹ |
| Chg in FII Hold | -4.20 % | Chg in DII Hold | -1.77 % | PAT Qtr | 71.0 Cr. | PAT Prev Qtr | 16.8 Cr. |
| RSI | 48.3 | MACD | -13.0 | Volume | 37,88,367 | Avg Vol 1Wk | 40,46,466 |
| Low price | 224 ₹ | High price | 595 ₹ | PEG Ratio | 0.25 | Debt to equity | 0.27 |
| 52w Index | 8.55 % | Qtr Profit Var | 40.6 % | EPS | 7.48 ₹ | Industry PE | 40.7 |
📊 Analysis: TARIL shows strong fundamentals with ROE at 20% and ROCE at 24.6%, reflecting efficient capital usage. EPS of 7.48 ₹ supports earnings visibility, while debt-to-equity ratio of 0.27 indicates manageable leverage. The PEG ratio of 0.25 highlights undervaluation relative to growth, making it attractive for long-term investors. However, dividend yield of 0.08% is negligible, limiting income potential. The stock trades at a P/E of 34.4, slightly below industry average (40.7), suggesting fair valuation. Technically, the stock is trading below both 50 DMA (284 ₹) and 200 DMA (384 ₹), showing medium-term weakness, with RSI at 48.3 and negative MACD (-13.0) confirming cautious sentiment. Quarterly PAT improved significantly (71 Cr. vs 16.8 Cr.), showing strong earnings recovery.
💡 Entry Zone: Ideal accumulation range is between 240 ₹ – 260 ₹, closer to support levels and valuation comfort.
📈 Exit / Holding Strategy: Existing holders should maintain positions for growth potential. Exit strategy: partial profit booking near 320–340 ₹ resistance. Holding period: 3–5 years, supported by strong ROE/ROCE and attractive PEG ratio, though technical weakness suggests staggered accumulation.
Positive
- Strong ROE (20%) and ROCE (24.6%) indicate efficient capital usage.
- PEG ratio of 0.25 highlights undervaluation relative to growth.
- EPS of 7.48 ₹ reflects earnings visibility.
- Quarterly PAT improved sharply (71 Cr. vs 16.8 Cr.).
Limitation
- Dividend yield of 0.08% is negligible.
- Stock trading below both 50 DMA and 200 DMA indicates weakness.
- Decline in both FII (-4.20%) and DII (-1.77%) holdings shows reduced institutional confidence.
Company Negative News
- Reduced institutional holdings (FII and DII) signal cautious sentiment.
- Weak technical indicators (negative MACD, RSI near neutral).
Company Positive News
- Strong quarterly PAT recovery highlights operational improvement.
- Fair valuation compared to industry average P/E.
Industry
- Industry P/E at 40.7 indicates premium valuations compared to TARIL’s fair multiple.
- Sector benefits from infrastructure expansion and industrial demand.
Conclusion
✅ TARIL is a good candidate for long-term investment given strong ROE/ROCE, attractive PEG ratio, and earnings recovery. Entry around 240–260 ₹ offers margin of safety. Long-term investors should hold for 3–5 years, with partial exits near 320–340 ₹. Despite weak technicals and reduced institutional interest, fundamentals support accumulation for growth-oriented portfolios.