Jio Financial Services Downgraded to 'Sell' by MarketsMOJO, Despite Strong Long-Term Fundamentals

Jio Financial Services, a largecap finance company, has recently been downgraded to a 'Sell' by MarketsMOJO on 13th November 2024. This downgrade is due to the stock being in a bearish range and the technical trend deteriorating from mildly bullish. Since then, the stock has generated a negative return of -3.51%. Factors such as MACD, Bollinger Band, and KST also contribute to the bearish outlook for the stock.
One of the main reasons for the downgrade is the expensive valuation of the stock, with a price to book value of 1.4 and a return on equity of only 1.2. However, over the past year, the stock has still managed to generate a return of 33.19%, despite its profits rising by a staggering 5035%.

On the other hand, Jio Financial Services has strong long-term fundamental strength, with a CAGR growth of 3,016.42% in operating profits. This is supported by a healthy long-term growth rate in net sales and operating profit, at 4,353.20% and 3,016.42% respectively.

In addition, the company has recently declared positive results in September 2024, after flat results in June 2024. The net sales for the quarter were at a record high of Rs 693.50 crore, while PBDIT and PBT less OI were also at their highest at Rs 553.04 crore and Rs 773.14 crore respectively.

It is also worth noting that Jio Financial Services has a high institutional holding of 28.46%, indicating that these investors have the capability and resources to thoroughly analyze the fundamentals of the company. This further adds to the credibility of the company's long-term growth potential.

In conclusion, while the recent downgrade by MarketsMOJO may raise concerns, Jio Financial Services still has strong long-term fundamentals and a track record of positive results. Investors should carefully consider all factors before making any investment decisions.