Technical Trends Signal a Shift to Sideways Movement
The technical landscape for Capri Global Capital has transitioned from a mildly bullish stance to a more sideways trend. Weekly and monthly technical indicators present a mixed picture. The Moving Average Convergence Divergence (MACD) shows a mildly bearish signal on a weekly basis, contrasting with a bullish outlook monthly. Meanwhile, the Relative Strength Index (RSI) remains neutral without clear directional signals in both weekly and monthly frames.
Bollinger Bands, which measure volatility and price levels relative to moving averages, indicate bearish tendencies on both weekly and monthly charts. The daily moving averages, however, maintain a mildly bullish posture, suggesting some short-term upward momentum. Other technical tools such as the Know Sure Thing (KST) oscillator and Dow Theory provide conflicting signals, with weekly data leaning mildly bearish and monthly data showing mild bullishness. The On-Balance Volume (OBV) metric lacks a definitive trend weekly and shows mild bearishness monthly.
This blend of technical signals points to a period of consolidation and uncertainty in price direction, which has influenced the broader market assessment of Capri Global Capital’s stock.
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Financial Performance Remains a Strong Pillar
Despite the technical ambiguity, Capri Global Capital’s financial results continue to reflect strength and resilience. The company reported outstanding performance in the second quarter of the fiscal year 2025-26, with net sales reaching ₹1,121.37 crores, marking a growth rate of 49.18% compared to previous periods. Operating profits have expanded at a compound annual growth rate (CAGR) of 35.75%, underscoring sustained operational efficiency.
Profit before tax (PBT) excluding other income stood at ₹311.57 crores, growing at 145.16%, while net profit after tax (PAT) was ₹236 crores, reflecting a 143.3% increase. These figures highlight a consistent upward trajectory in profitability, supported by positive results over the last eleven consecutive quarters.
The company’s return on equity (ROE) is recorded at 10.7%, which, combined with a price-to-book value of 2.7, suggests an attractive valuation relative to its sector peers. Capri Global Capital’s stock is currently trading at a discount compared to the average historical valuations of similar NBFCs, offering potential value for investors who prioritise fundamentals.
Valuation and Market Returns Present a Complex Picture
While Capri Global Capital’s financial metrics are encouraging, the stock’s market returns have not mirrored this strength in recent periods. Over the past year, the stock has generated a return of -10.32%, underperforming the BSE500 benchmark and the Sensex, which posted gains of 4.15% and 8.91% respectively over comparable time frames.
Longer-term returns show a more favourable trend, with a 5-year return of 166.75% and a remarkable 10-year return exceeding 2,375%. However, the stock has consistently lagged behind the Sensex and broader market indices over the last three years, indicating challenges in market sentiment or sector-specific headwinds.
The company’s price-to-earnings-to-growth (PEG) ratio stands at 0.3, which may suggest undervaluation relative to its earnings growth rate. Institutional investors hold a significant stake of 25.12%, reflecting confidence from market participants with deeper analytical resources.
Comparative Performance Against Sensex and Sector Benchmarks
Capri Global Capital’s stock returns over various periods compared to the Sensex reveal a pattern of underperformance in the short to medium term. For instance, in the last one month, the stock declined by 5.64%, whereas the Sensex advanced by 2.27%. Over one week, the stock fell by 2.26%, while the Sensex saw a smaller dip of 0.63%. Year-to-date figures also show the stock slightly down by 0.70%, contrasting with the Sensex’s 8.91% gain.
These disparities highlight the stock’s sensitivity to market fluctuations and sector-specific factors, despite its solid financial foundation. Investors may interpret this as a sign of caution, especially given the sideways technical trend and mixed momentum indicators.
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Summary of Evaluation Parameters Influencing Market Assessment
The recent revision in Capri Global Capital’s market assessment can be attributed to four key parameters: quality, valuation, financial trend, and technicals.
Quality: The company’s quality remains robust, supported by consistent quarterly profitability and strong operating profit growth. Eleven consecutive quarters of positive results and a healthy ROE of 10.7% reinforce the company’s operational strength and management effectiveness.
Valuation: Capri Global Capital’s valuation metrics suggest it is trading at a discount relative to its sector peers, with a price-to-book ratio of 2.7 and a PEG ratio of 0.3. This indicates that the stock may offer value considering its earnings growth, although market returns have not fully reflected this potential.
Financial Trend: The company’s financial trend is characterised by strong growth in net sales and profits. Net sales have expanded at an annual rate exceeding 40%, while operating profits have grown at nearly 36% CAGR. Profit before tax and net profit have both more than doubled in recent quarters, signalling a positive trajectory in core financial performance.
Technicals: The technical indicators present a more cautious outlook. The shift from a mildly bullish to a sideways trend, combined with mixed signals from MACD, Bollinger Bands, and other oscillators, suggests a period of consolidation. This technical uncertainty has influenced the overall market assessment despite the company’s fundamental strengths.
Outlook and Considerations for Investors
Capri Global Capital’s current market evaluation reflects a balance between strong fundamental performance and cautious technical signals. The company’s impressive financial growth and attractive valuation metrics provide a solid foundation for long-term investors. However, the recent sideways technical trend and underperformance relative to benchmark indices in the short term suggest that market sentiment remains tentative.
Investors considering Capri Global Capital should weigh the company’s consistent profitability and growth against the prevailing technical environment and recent price movements. The significant institutional holding indicates confidence from sophisticated market participants, which may provide some reassurance amid market volatility.
Overall, Capri Global Capital remains a noteworthy entity within the NBFC sector, with a complex but promising profile shaped by both fundamental strength and evolving market dynamics.
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