TBOTEK - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 2.5
| Stock Code | TBOTEK | Market Cap | 15,763 Cr. | Current Price | 1,452 ₹ | High / Low | 1,765 ₹ |
| Stock P/E | 333 | Book Value | 75.6 ₹ | Dividend Yield | 0.00 % | ROCE | 14.4 % |
| ROE | 10.3 % | Face Value | 1.00 ₹ | DMA 50 | 1,539 ₹ | DMA 200 | 1,516 ₹ |
| Chg in FII Hold | 0.12 % | Chg in DII Hold | 0.11 % | PAT Qtr | 9.88 Cr. | PAT Prev Qtr | 16.8 Cr. |
| RSI | 42.8 | MACD | -51.7 | Volume | 70,559 | Avg Vol 1Wk | 1,18,332 |
| Low price | 986 ₹ | High price | 1,765 ₹ | PEG Ratio | 14.4 | Debt to equity | 0.12 |
| 52w Index | 59.9 % | Qtr Profit Var | -27.2 % | EPS | 4.23 ₹ | Industry PE | 41.4 |
📊 Analysis: TBOTEK shows weak fundamentals for long-term compounding. ROE at 10.3% and ROCE at 14.4% are modest but not strong enough to justify the extremely high P/E of 333 compared to the industry average of 41.4. The PEG ratio of 14.4 highlights expensive growth prospects. Dividend yield is 0%, offering no passive returns. EPS of 4.23 ₹ is low relative to valuation. Technicals show weakness with MACD at -51.7 and RSI at 42.8, indicating bearish sentiment. The ideal entry zone lies between 1,000–1,200 ₹ for margin of safety. For existing holders, consider a medium-term horizon with partial exit near 1,500–1,550 ₹ resistance unless earnings growth improves significantly.
✅ Positive
- Market cap of 15,763 Cr. provides scale and stability.
- Low debt-to-equity ratio (0.12) ensures financial discipline.
- Institutional participation increased slightly (FII +0.12%, DII +0.11%).
- Book value of 75.6 ₹ provides some valuation support.
⚠️ Limitation
- Extremely high P/E (333) compared to industry average (41.4).
- PEG ratio of 14.4 highlights expensive growth valuation.
- Dividend yield of 0% offers no passive income.
- EPS of 4.23 ₹ is weak relative to price.
📉 Company Negative News
- Quarterly PAT declined (9.88 Cr. vs 16.8 Cr.).
- Quarterly profit variation at -27.2% indicates earnings pressure.
- Bearish technical indicators (MACD negative, RSI weak).
📈 Company Positive News
- Institutional investors marginally increased holdings.
- Debt levels remain low, enhancing financial stability.
🏭 Industry
- Technology sector has long-term demand drivers: digital adoption, automation, and innovation.
- Industry P/E at 41.4 suggests TBOTEK trades at a steep premium.
- Structural drivers: IT services expansion, product innovation, and global outsourcing trends.
🔎 Conclusion
TBOTEK earns a rating of 2.5 due to modest ROE/ROCE but extremely expensive valuations and weak earnings momentum. Long-term investors should avoid fresh entry unless valuations correct to 1,000–1,200 ₹. Current holders may adopt a medium-term horizon, with partial profit booking near 1,500–1,550 ₹ resistance unless profitability improves. The stock remains speculative and unsuitable for long-term compounding at current levels.