CHOLAFIN - Swing Trade Analysis with AI Signals

Last Updated Time : 20 Dec 25, 07:01 am

Swing Trade Rating: 4.3

📊 CHOLAFIN shows strong potential for swing trading. The stock is trading close to its 50 DMA (1,684 ₹) and above its 200 DMA (1,571 ₹), reflecting medium-term strength. RSI at 44.9 suggests neutral momentum, while MACD (2.94) indicates mild bullish sentiment. Fundamentally, the company has delivered consistent profit growth (+20% quarterly variation) and EPS of 55.2 ₹, though high leverage (debt-to-equity 7.24) warrants caution. Overall, it is a good candidate for swing trading.

💡 Optimal Entry Price: Around 1,620–1,630 ₹ (near support zone).

🚪 Exit Strategy: If already holding, consider exiting near 1,700–1,720 ₹ (resistance at 50 DMA) or trail stop-loss below 1,600 ₹ to manage risk.

✅ Positive

• 📈 Consistent profit growth with PAT rising from 1,136 Cr. to 1,155 Cr.
• 💰 Strong ROE (19.7%) highlights shareholder return efficiency.
• 📊 EPS of 55.2 ₹ supports earnings visibility.
• 📈 52-week return of 77.8% reflects strong past momentum.

⚠️ Limitation

• 📉 High debt-to-equity ratio (7.24) raises financial risk concerns.
• 📊 P/E of 29.8 is higher than industry PE (21.2), suggesting premium valuation.
• 📉 Low dividend yield (0.12%) offers limited income support.

🚨 Company Negative News

• 📉 FII holding reduced (-1.11%), showing foreign investor caution.
• 📉 High leverage compared to peers may limit flexibility.

🌟 Company Positive News

• 📈 DII holding increased (+1.22%), reflecting strong domestic institutional confidence.
• 💡 Quarterly profit growth (+20%) highlights earnings resilience.

🏭 Industry

• 📊 Industry PE at 21.2, lower than CHOLAFIN’s PE, suggesting sector trades at more reasonable valuations.
• 📈 Financial services sector remains strong, supported by credit demand and lending growth.

📌 Conclusion

CHOLAFIN is a strong swing trade candidate with consistent profit growth and favorable technical positioning. Entry near 1,620–1,630 ₹ offers a good risk-reward setup, while exits should be targeted around 1,700–1,720 ₹. Caution is advised due to high leverage and reduced FII interest, but overall fundamentals and domestic support make it appealing for short-term trades.

Would you like me to also contrast CHOLAFIN’s swing trade setup with another NBFC stock to highlight relative sector strength?