Fino Payments Bank Downgraded to 'Sell' by MarketsMOJO Due to Flat Results and Expensive Valuation

Fino Payments Bank, a smallcap company in the finance/NBFC industry, has recently been downgraded to a 'Sell' by MarketsMOJO on November 29, 2024. This decision was based on the company's flat results in the September 2024 quarter, with its PBDIT(Q) and PBT LESS OI(Q) at their lowest at Rs -381.73 crore. Additionally, the company's PAT(Q) has also fallen by -7.8% at Rs 21.15 crore.
One of the main reasons for the downgrade is the company's expensive valuation, with a price to book value of 4.6 and a ROE of 13.9. However, it is worth noting that the stock is currently trading at a discount compared to its average historical valuations. Despite generating a return of 26.90% in the past year, the company's profits have only risen by 17.7%, resulting in a PEG ratio of 1.9.

On the positive side, Fino Payments Bank has shown strong long-term fundamental strength with a 60.04% CAGR growth in operating profits. Its net sales have also grown at an annual rate of 93.19%, while operating profit has grown at 60.04%. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from mildly bullish on November 26, 2024, and has generated a return of 3.45% since then.

It is worth noting that the majority shareholders of Fino Payments Bank are promoters, which may indicate their confidence in the company's long-term growth potential. However, it is important to consider all factors before making any investment decisions.