Capital India Finance Receives 'Hold' Rating

Capital India Finance, a smallcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in September 2023, with a higher PAT (HY) of Rs 3.58 crore and the highest PBDIT (Q) of Rs 29.21 crore. The operating profit to net sales (Q) also reached its highest at 16.70%.
The stock is currently in a bullish range and the technical trend has improved from mildly bullish on 22nd December 2023. Multiple factors such as MACD, Bollinger Band, and KST indicate a bullish outlook for the stock.

In the last year, Capital India Finance has outperformed the market (BSE 500) with a return of 42.65%, compared to the market's return of 22.62%. However, the company's long-term fundamental strength is weak, with an average ROE of 1.26% and a poor growth rate of -30.58% for operating profit.

The stock is currently trading at a premium compared to its historical valuations, with a price to book value of 1.7 and a ROE of -2.9. This may indicate an expensive valuation for the stock. Additionally, despite its size, domestic mutual funds hold only 0% of the company, which could suggest that they are not comfortable with the current price or the business.

Overall, while Capital India Finance has shown strong market-beating performance in the past year, its weak long-term fundamentals and expensive valuation may warrant a 'Hold' rating for now. Investors should carefully consider their options before making any decisions regarding this smallcap finance company.