Gilada Finance & Investments Ltd Upgraded to Hold on Technical Improvements and Valuation Appeal

Quality Assessment: Mixed Fundamentals with Moderate Returns

Gilada Finance operates within the Non Banking Financial Company (NBFC) sector, a space characterised by volatility and regulatory scrutiny. The company’s long-term fundamental strength remains moderate, with an average Return on Equity (ROE) of 7.99%, which is below the ideal benchmark for robust financial health. For the latest quarter ending September 2025, the company reported flat financial performance, indicating a lack of significant growth momentum in the near term.

Despite this, Gilada’s ROE for the current period stands at 8.5%, suggesting a slight improvement over historical averages. This figure, while not outstanding, is sufficient to maintain investor interest given the company’s valuation and growth prospects. Profit growth over the past year has been encouraging, with a 20.9% increase, signalling operational efficiencies or improved asset quality. However, the flat quarterly results temper enthusiasm, highlighting the need for sustained performance to justify a higher rating.

Valuation: Attractive Price-to-Book and PEG Ratios Support Upgrade

One of the key drivers behind the upgrade to Hold is Gilada Finance’s attractive valuation metrics. The stock currently trades at a Price-to-Book (P/B) ratio of 0.8, which is below the industry average, indicating that the market values the company’s net assets conservatively. This valuation suggests potential upside if the company can leverage its asset base more effectively.

Additionally, the Price/Earnings to Growth (PEG) ratio stands at a low 0.4, reflecting that the stock is undervalued relative to its earnings growth rate. This metric is particularly compelling for investors seeking growth at a reasonable price, as it implies that Gilada’s earnings growth is not fully priced into the current share price. The stock’s market capitalisation grade is rated 4, indicating a mid-sized company with room for expansion.

Financial Trend: Stable but Flat Recent Performance

While the company’s financial trend has been largely stable, recent quarterly results have been flat, with no significant improvement in revenue or profitability. This stagnation is a concern for investors looking for momentum plays. However, the year-to-date return of 7.53% and a one-year return of 10.26% outperform the Sensex’s 7.62% over the same period, suggesting that the stock has delivered reasonable returns despite sector headwinds.

Longer-term returns paint a mixed picture: over five years, Gilada Finance has delivered a robust 121.76% return, significantly outperforming the Sensex’s 77.88%. Yet, over three years, the stock has underperformed with a -24.05% return compared to the Sensex’s 38.54%. This volatility underscores the importance of monitoring financial trends closely before committing to a stronger rating.

Technical Analysis: Bullish Shift Spurs Upgrade

The most significant catalyst for the upgrade to Hold is the marked improvement in Gilada Finance’s technical indicators. The technical grade has shifted from mildly bullish to bullish, reflecting stronger momentum and positive market sentiment. Key technical signals include:

• MACD: Both weekly and monthly Moving Average Convergence Divergence indicators are bullish, signalling upward momentum in price trends.


• KST (Know Sure Thing): Weekly and monthly KST indicators are bullish, reinforcing the positive momentum outlook.


• Bollinger Bands: Mildly bullish on both weekly and monthly charts, indicating moderate upward price volatility within a stable range.


• Moving Averages: Daily moving averages are mildly bullish, suggesting short-term price strength.


• Dow Theory: Weekly trend is mildly bullish, though monthly shows no clear trend, indicating some caution in longer-term price direction.

Despite a slight decline in the stock price on the day of the upgrade (-1.28%), the technical indicators suggest a positive underlying trend. The stock’s current price of ₹13.86 is closer to its 52-week low of ₹9.30 than the high of ₹23.80, indicating potential for recovery if bullish momentum sustains.

Market Context and Shareholding

Gilada Finance’s majority shareholding remains with promoters, providing stability in governance and strategic direction. The company’s sector, NBFC, continues to face challenges including regulatory changes and credit risk concerns, which may temper investor enthusiasm despite technical improvements.

Comparatively, the stock’s returns have been mixed against the Sensex benchmark. While it has outperformed over the last year and five-year periods, the recent one-month and one-week returns have lagged significantly, with declines of -36.31% and -4.48% respectively, compared to Sensex’s modest losses. This volatility highlights the importance of a cautious stance, justifying the Hold rating rather than a more aggressive Buy.

Summary and Outlook

The upgrade of Gilada Finance & Investments Ltd from Sell to Hold by MarketsMOJO reflects a balanced view of the company’s current standing. While the flat quarterly financial performance and moderate ROE temper enthusiasm, the attractive valuation and bullish technical indicators provide a foundation for cautious optimism.

Investors should note the stock’s mixed recent returns and sector-specific risks, which warrant a Hold rating rather than a Buy. The company’s PEG ratio of 0.4 and P/B of 0.8 suggest undervaluation, but sustained financial improvement will be necessary to justify a higher rating in the future.

Given the stock’s current price near ₹13.86 and its 52-week range between ₹9.30 and ₹23.80, there is potential for upside if the bullish technical trends persist and financial results improve. However, investors should monitor quarterly earnings closely and remain mindful of NBFC sector dynamics before increasing exposure.

Technical and Fundamental Parameters Driving the Rating Change

The upgrade was primarily triggered by four key parameters:

• Quality: Moderate with an average ROE of 7.99%, flat recent quarterly results but 20.9% profit growth over the past year.


• Valuation: Attractive with a P/B ratio of 0.8 and PEG ratio of 0.4, indicating undervaluation relative to growth prospects.


• Financial Trend: Stable but flat quarterly performance; positive year-to-date and one-year returns outperforming Sensex.


• Technicals: Upgraded from mildly bullish to bullish, supported by MACD, KST, Bollinger Bands, and moving averages.

These factors combined have led MarketsMOJO to revise Gilada Finance’s Mojo Score to 51.0 and upgrade its Mojo Grade from Sell to Hold as of 29 December 2025.

Investor Considerations

For investors, the Hold rating suggests maintaining current positions while awaiting clearer signs of financial improvement or stronger technical confirmation. The stock’s volatility and sector risks mean that a cautious approach is prudent, with potential upside balanced by near-term uncertainties.

Gilada Finance’s position within the NBFC sector and promoter backing provide some stability, but investors should keep an eye on regulatory developments and credit quality trends that could impact future performance.

Conclusion

In conclusion, Gilada Finance & Investments Ltd’s upgrade to Hold reflects a nuanced assessment of its valuation, technical momentum, and financial fundamentals. While not yet a compelling Buy, the stock’s improved technical outlook and attractive valuation metrics warrant a more positive stance than previously held. Investors should monitor upcoming quarterly results and sector developments to reassess the stock’s potential for further upgrades.

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