FACT - Swing Trade Analysis with AI Signals

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

Swing Trade Rating: 2.7

📊 FACT shows weak potential for swing trading despite strong quarterly profit growth. The fundamentals are stretched with an extremely high P/E (616 vs industry 20.3), very low EPS (1.61 ₹), and poor ROE (1.61%). Technical indicators (RSI 47.4, MACD negative) suggest neutral-to-bearish momentum. The stock is trading slightly below its 50 DMA (878 ₹) and 200 DMA (893 ₹), showing weakness. Optimal entry would be near 830–840 ₹. If already holding, consider exiting around 950–980 ₹ if momentum improves.

✅ Positive

• 📈 Strong quarterly PAT growth (20.9 Cr. vs 4.28 Cr., +86.4%).
• 💰 Large market cap (55,884 Cr.) provides liquidity and stability.
• 🌍 Slight increase in FII holdings (+0.01%).

⚠️ Limitation

• 📉 Extremely high P/E ratio (616) compared to industry average (20.3).
• 📊 Weak ROCE (8.65%) and ROE (1.61%) indicate poor capital efficiency.
• 📉 Debt-to-equity ratio at 2.79 is relatively high.
• 📉 RSI at 47.4 and MACD (-9.93) show weak momentum.
• 📉 Current trading volume significantly below 1-week average.
• 📊 EPS of 1.61 ₹ is very low relative to valuation.

🚨 Company Negative News

No major negative news reported, but reduced DII holdings (-8.56%) highlight declining domestic investor confidence.

🌟 Company Positive News

Strong quarterly profit growth and stable market capitalization provide some support despite valuation concerns.

🏭 Industry

The fertilizer and chemicals industry trades at an average P/E of 20.3. FACT trades at a massive premium (616), reflecting growth expectations but also significant overvaluation risk.

📌 Conclusion

FACT is a risky candidate for swing trading due to weak fundamentals, high debt, and extreme valuation. Entry near 830–840 ₹ is optimal for risk-tolerant traders. Exit strategy should target 950–980 ₹ if momentum strengthens. Caution is strongly advised given overvaluation, weak technical indicators, and declining domestic investor interest.

I can also prepare a peer comparison within the fertilizer and chemicals sector to highlight whether FACT offers better or worse swing trade potential than its competitors.