CRAFTSMAN - Swing Trade Analysis with AI Signals

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

Swing Trade Rating: 3.8

📊 CRAFTSMAN shows moderate potential for swing trading. The stock is trading above both its 50 DMA (6,871 ₹) and 200 DMA (6,222 ₹), reflecting bullish momentum. RSI at 55.6 suggests healthy strength without being overbought, while MACD (60.9) confirms strong bullish sentiment. Fundamentally, the company has delivered solid quarterly profit growth (+65%), but valuations are extremely stretched with a P/E of 140 compared to industry PE of 30.0. High leverage (debt-to-equity 0.96) and weak ROE (4.31%) add caution.

💡 Optimal Entry Price: Around 6,950–7,000 ₹ (near 50 DMA support).

🚪 Exit Strategy: If already holding, consider exiting near 7,300–7,350 ₹ (resistance close to recent highs) or trail stop-loss below 6,850 ₹ to manage risk.

✅ Positive

• 📈 Trading above key moving averages indicates strong technical momentum.
• 💰 Quarterly PAT growth (+65%) highlights earnings resilience.
• 📊 DII holding increased (+1.70%), showing strong domestic institutional support.
• 📈 52-week return of 90.9% reflects excellent past performance.

⚠️ Limitation

• 📉 Extremely high P/E (140) compared to industry PE (30.0), suggesting overvaluation.
• 📊 Negative PEG ratio (-8.63) highlights poor growth alignment with valuation.
• 📉 Low ROE (4.31%) and ROCE (8.11%) reflect weak capital efficiency.
• 📉 Dividend yield (0.07%) offers negligible income support.

🚨 Company Negative News

• 📉 FII holding reduced (-0.39%), showing foreign investor caution.
• 📉 High leverage (Debt-to-equity 0.96) raises financial risk concerns.

🌟 Company Positive News

• 📈 PAT improved from 39.7 Cr. to 47.2 Cr. in the latest quarter.
• 💡 EPS at 50.2 ₹ supports earnings visibility.

🏭 Industry

• 📊 Industry PE at 30.0, far lower than CRAFTSMAN’s PE, suggesting sector trades at more reasonable valuations.
• 📈 Auto ancillary and engineering sector demand remains supportive, driven by manufacturing growth.

📌 Conclusion

CRAFTSMAN is a cautious swing trade candidate with strong technical momentum but stretched valuations. Entry near 6,950–7,000 ₹ offers a favorable risk-reward setup, while exits should be targeted around 7,300–7,350 ₹. Caution is advised due to high leverage, weak efficiency metrics, and reduced FII interest, but strong sector demand and recent profit growth provide support for short-term trades.

Would you like me to also contrast CRAFTSMAN’s swing trade potential with another auto ancillary stock to highlight relative sector strength?