NUVAMA - Swing Trade Analysis with AI Signals

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

Swing Trade Rating: 3.9

📊 NUVAMA shows strong fundamentals with high ROE/ROCE and attractive PEG ratio (0.36), but faces short-term earnings weakness. Technically, the stock is trading above DMA 50 (7,155 ₹) and DMA 200 (6,807 ₹), indicating bullish support. RSI (53.8) and positive MACD (6.58) suggest moderate upward momentum, though profit volatility is a concern.

💡 Optimal Entry Price: Around 7,050–7,150 ₹ (near DMA 50 support).

🚪 Exit Strategy (if already holding): Consider profit booking near 7,800–8,000 ₹ (resistance zone) or exit if price falls below 6,800 ₹ (DMA 200 support).

Positive

• ✅ Strong ROCE (30.6%) and ROE (32.6%) reflect efficient capital use.
• ✅ PEG ratio of 0.36 suggests undervaluation relative to growth potential.
• ✅ EPS of 140 ₹ indicates strong earnings power.
• ✅ Dividend yield of 2.02% adds shareholder value.
• ✅ High trading volume (3.44 lakh vs avg 1.18 lakh) shows strong market participation.

Limitation

• ⚠️ High P/E (52.0) compared to industry average (20.7), signaling overvaluation risk.
• ⚠️ Quarterly PAT dropped sharply from 221 Cr. to 46.4 Cr. (-85.4%).
• ⚠️ FII holding decreased (-0.84%), showing reduced foreign investor confidence.
• ⚠️ Current price still below 52-week high (8,510 ₹), indicating resistance overhead.

Company Negative News

• 📉 Significant decline in quarterly profit (-85.4%) raises concerns about earnings stability.
• 📉 Overvaluation compared to industry peers may limit upside potential.

Company Positive News

• 📈 Strong fundamentals with high ROE/ROCE and consistent dividend payouts.
• 📈 DII holding increased (+1.24%), showing domestic institutional support.

Industry

• 🏭 Industry P/E at 20.7 indicates sector is moderately valued compared to NUVAMA’s higher valuation.
• 🏭 Financial services sector benefits from rising retail participation and long-term growth outlook.

Conclusion

🔎 NUVAMA is a moderately attractive swing trade candidate with strong fundamentals but weak recent earnings. Entry near 7,050–7,150 ₹ offers a favorable setup, with exit targets around 7,800–8,000 ₹. Traders should monitor earnings trend and institutional flows closely, as valuation remains stretched relative to peers.

Would you like me to extend this with a peer benchmarking overlay comparing NUVAMA against other financial service firms, or a basket scan to see if sector rotation favors financials over IT and manufacturing?