Ceejay Finance Faces Declining Profitability Amidst Weak Long-Term Fundamentals

Ceejay Finance, a microcap player in the finance/NBFC sector, has recently undergone an evaluation adjustment that reflects its current market standing. The company reported flat financial performance for the quarter ending December 2024, with a profit after tax (PAT) of Rs 1.14 crore, which represents a decline of 14.9%. Additionally, the profit before tax (PBT) excluding other income reached its lowest point at Rs 1.66 crore, while earnings per share (EPS) also hit a low of Rs 3.30.
The underlying trends indicate weak long-term fundamental strength, highlighted by an average return on equity (ROE) of 9.54%. The company's net sales have shown modest growth at an annual rate of 8.27%, with operating profit growth trailing at 6.83%. Furthermore, Ceejay Finance has underperformed the broader market, with a return of -20.27% over the past year, compared to the BSE 500's negative return of -1.20%.

Technical indicators suggest a mildly bearish trend, with multiple factors pointing towards a challenging outlook. The stock is currently trading at a premium relative to its peers' average historical valuations, despite an attractive valuation indicated by a price-to-book value of 0.9.

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