Dhanlaxmi Bank Receives 'Hold' Rating from MarketsMOJO, Showing Positive Outlook for Company

Dhanlaxmi Bank, a smallcap private bank, has recently received an upgraded stock call from MarketsMOJO. The stock has been upgraded to 'Hold' on 11th March 2024. This upgrade is based on several factors that indicate a positive outlook for the company.
One of the main reasons for the 'Hold' rating is the healthy long-term growth of the company. Dhanlaxmi Bank has shown an annual growth rate of 36.85% in net profit, which is a positive sign for investors. Additionally, the stock is currently in a bullish range and has generated a return of -3.13% since 7th March 2024. The technical trend has also improved from Mildly Bullish to Bullish, with the MACD and KST technical factors also showing a bullish trend.

Another factor contributing to the 'Hold' rating is the increasing participation of institutional investors. These investors have increased their stake in the company by 1.12% in the previous quarter and now collectively hold 11.96% of the company. This is a positive sign as institutional investors have better resources and capabilities to analyze the fundamentals of companies compared to retail investors.

Dhanlaxmi Bank has also shown a market-beating performance in both the long-term and near-term. In the last 1 year, the stock has generated a return of 181.32%, outperforming the BSE 500. It has also outperformed the market in the last 3 years, 1 year, and 3 months.

However, it is important to note that the company has declared negative results in December 2023 after 7 consecutive positive quarters. The profit after tax (PAT) has fallen by -86.0%, with the net interest income (NII) and profit before depreciation, interest, and taxes (PBDIT) also showing a decline. This has resulted in a ROA of 0.6, which is a cause for concern.

Moreover, the stock is currently trading at a premium compared to its average historical valuations. The price to book value is 1.1, indicating an expensive valuation. Additionally, while the stock has generated a return of 181.32% in the past year, its profits have only risen by 167.8%. This results in a PEG ratio of 0.1, which is relatively low.

In conclusion, while Dhanlaxmi Bank has shown positive growth and performance in the past, the recent negative results and expensive valuation should be considered before making any investment decisions. The 'Hold' rating by MarketsMOJO suggests a neutral stance on the stock, and investors should carefully analyze all factors before making any decisions.