The recent change in D.P. Abhushan’s evaluation was triggered primarily by developments in its technical grade, which shifted from a mildly bearish stance to a sideways trend. This technical transition is supported by a mixed set of indicators: the weekly MACD suggests a mildly bullish momentum, while monthly signals remain neutral. The weekly Bollinger Bands indicate bullishness, contrasting with sideways movement on the monthly scale. Daily moving averages continue to show mild bearishness, and the KST indicator on a weekly basis remains bearish. Meanwhile, the Dow Theory presents a mildly bullish weekly outlook but mildly bearish monthly signals. On balance, the On-Balance Volume (OBV) readings are bullish for both weekly and monthly periods, signalling positive volume trends supporting price movements.
From a price perspective, D.P. Abhushan’s current market price stands at ₹1,572.75, slightly above the previous close of ₹1,567.75. The stock’s intraday range on the trigger date spanned from ₹1,565.75 to ₹1,647.55, reflecting moderate volatility. Over the past 52 weeks, the stock has traded between ₹1,210.00 and ₹1,894.30, indicating a broad trading range within the year.
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Examining the company’s financial trend reveals a robust performance in the second quarter of FY25-26. D.P. Abhushan has demonstrated a consistent positive trajectory, with net sales growing at an annualised rate of 37.09% and operating profit expanding at 43.64%. The company has reported positive results for 11 consecutive quarters, underscoring operational stability and growth momentum. Profit before tax excluding other income for the quarter reached ₹69.22 crores, reflecting a growth rate of 108.06%. The PBDIT for the quarter was recorded at ₹75.71 crores, marking the highest level in recent periods, while PAT stood at ₹51.46 crores, also at a peak.
In terms of quality, D.P. Abhushan’s ability to service debt remains strong, with a Debt to EBITDA ratio of 1.46 times, indicating manageable leverage relative to earnings. The company’s return on capital employed (ROCE) is reported at 30.8%, which aligns with a fair valuation framework. The enterprise value to capital employed ratio stands at 5.4, suggesting that the stock is trading at a discount relative to its peers’ historical averages. This valuation context is further supported by a PEG ratio of 0.3, highlighting the relationship between price, earnings growth, and valuation.
When comparing returns, D.P. Abhushan’s stock has outperformed the Sensex over shorter time frames. The stock generated a 5.78% return over the past week and 13.24% over the last month, while the Sensex returned 0.96% and 0.86% respectively during these periods. Year-to-date, the stock’s return is 6.7%, slightly below the Sensex’s 8.36%. Over the last year, the stock’s return was 1.4%, compared to the Sensex’s 9.48%. Longer-term return data for three, five, and ten years is not available for the stock, while the Sensex posted returns of 37.31%, 91.65%, and 232.28% respectively over these periods.
Despite the company’s size and financial metrics, domestic mutual funds currently hold no stake in D.P. Abhushan. Given that mutual funds typically conduct thorough on-the-ground research, this absence may indicate a cautious stance regarding the stock’s price or business fundamentals at present.
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In summary, the adjustment in D.P. Abhushan’s evaluation reflects a balanced consideration of four key parameters. The technical trend’s shift to sideways from mildly bearish suggests a stabilisation in price momentum, supported by mixed but generally positive technical indicators. The company’s financial trend remains healthy, with strong quarterly growth in sales and profits, alongside a consistent record of positive results. Valuation metrics indicate the stock is trading at a discount relative to peers, supported by a reasonable ROCE and enterprise value to capital employed ratio. Quality indicators, including debt servicing capacity and profitability ratios, further underpin the company’s operational soundness.
Investors analysing D.P. Abhushan should weigh these factors in the context of sector dynamics within Gems, Jewellery and Watches, and broader market conditions. While short-term returns have outpaced the benchmark index, longer-term returns lag behind, highlighting the importance of monitoring ongoing financial performance and market sentiment. The absence of domestic mutual fund holdings may also be a consideration for those seeking institutional validation.
Overall, the revision in evaluation offers a nuanced perspective on D.P. Abhushan’s current investment profile, reflecting a comprehensive analysis of technical, financial, valuation, and quality parameters.
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