Quality Assessment: Weak Fundamentals Persist
Beryl Securities continues to exhibit weak long-term fundamental strength, which remains a significant concern for investors. The company’s average Return on Equity (ROE) is a mere 2.19%, signalling limited profitability relative to shareholder equity. This low ROE is compounded by flat financial performance in the recent quarter (Q2 FY25-26), with earnings per share (EPS) hitting a quarterly low of Rs -0.43, underscoring ongoing operational challenges.
Operating profit growth has been sluggish, expanding at an annual rate of just 1.55%, which is insufficient to inspire confidence in the company’s growth trajectory. Over the past year, profits have declined by 38%, a stark contrast to the broader market’s positive earnings momentum. This weak financial trend has contributed to the company’s underperformance relative to benchmarks, with Beryl Securities delivering a negative return of -25.27% over the last 12 months, while the BSE500 index gained 8.76% in the same period.
Valuation: Fair but Discounted Relative to Peers
Despite the weak fundamentals, Beryl Securities trades at a relatively fair valuation, with a Price to Book (P/B) ratio of 1.3. This valuation is modestly discounted compared to its peer group’s historical averages, suggesting some value for investors willing to tolerate the company’s operational risks. The stock’s current market price is ₹25.85, up from the previous close of ₹24.70, but still significantly below its 52-week high of ₹41.88.
The company’s market capitalisation grade is rated 4, indicating a mid-tier market cap status within the NBFC sector. Promoters remain the majority shareholders, which may provide some stability in ownership but has not translated into improved financial performance or growth.
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Financial Trend: Flat Performance Amidst Market Underperformance
The company’s financial trend remains flat, with no significant improvement in quarterly results. The EPS of Rs -0.43 in the latest quarter highlights ongoing losses, while operating profit growth remains minimal. This stagnation contrasts sharply with the broader market’s positive returns, as the Sensex has delivered 8.61% over the past year, whereas Beryl Securities has declined by over 25% in the same timeframe.
Longer-term returns show a mixed picture: the stock has generated a 3-year return of 109.65%, outperforming the Sensex’s 37.97% over the same period. However, the 10-year return of 126.75% lags behind the Sensex’s 234.22%, indicating that the company’s growth has not kept pace with the broader market over the long haul.
Technicals: Mild Improvement Drives Rating Upgrade
The primary catalyst for the recent upgrade from Strong Sell to Sell is the change in technical indicators. The technical trend has shifted from sideways to mildly bearish, signalling a slight improvement in market sentiment. Key technical metrics present a nuanced picture:
- MACD: Weekly readings remain bearish, but monthly indicators have softened to mildly bearish.
- RSI: Both weekly and monthly Relative Strength Index readings show no clear signal, indicating a neutral momentum.
- Bollinger Bands: Weekly data is mildly bearish, while monthly data remains bearish, suggesting some volatility but potential for stabilisation.
- Moving Averages: Daily moving averages have turned mildly bullish, providing short-term support for the stock price.
- KST (Know Sure Thing): Weekly KST is bullish, though monthly remains mildly bearish, reflecting mixed momentum across timeframes.
- Dow Theory: Weekly shows no clear trend, while monthly remains mildly bearish.
On 28 Jan 2026, the stock price closed at ₹25.85, up 4.66% on the day, with a high of ₹25.93 and a low of ₹25.85, indicating some buying interest. The 52-week low stands at ₹22.00, while the 52-week high is ₹41.88, highlighting the stock’s wide trading range over the past year.
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Investment Outlook and Summary
While Beryl Securities Ltd’s upgrade to a Sell rating from Strong Sell reflects a modest improvement in technical indicators, the company’s fundamental challenges remain significant. Weak profitability, flat financial trends, and underperformance relative to the broader market continue to weigh heavily on the stock’s investment appeal.
Investors should note that the company’s valuation is fair but not compelling enough to offset the risks posed by its poor earnings growth and low ROE. The technical signals suggest some short-term stability, but the mixed momentum indicators imply that a sustained recovery is uncertain without fundamental improvements.
Given these factors, the Sell rating advises caution, recommending that investors monitor the company’s financial performance closely while considering alternative opportunities within the NBFC sector or broader market.
Key Metrics at a Glance:
- Mojo Score: 31.0 (Sell, upgraded from Strong Sell)
- Market Cap Grade: 4
- Price: ₹25.85 (Previous Close: ₹24.70)
- 52-Week Range: ₹22.00 - ₹41.88
- ROE: 2.19%
- Operating Profit Growth: 1.55% annualised
- EPS (Q2 FY25-26): Rs -0.43
- 1-Year Stock Return: -25.27% vs Sensex +8.61%
Investors seeking exposure to the NBFC sector should weigh Beryl Securities’ current challenges against its valuation and technical signals, while considering the broader market context and peer performance.
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