MarketsMOJO downgrades 5Paisa Capital to 'Sell' as technical trend turns bearish

On October 21, 2024, MarketsMOJO downgraded its stock call on 5Paisa Capital to 'Sell'. The company, which operates in the finance and NBFC industry as a smallcap, has seen a decline in its technical trend from Sideways to Mildly Bearish since October 21, 2024. This has resulted in a negative return of -3.55% since then. Additionally, a key technical factor, the Bollinger Band, has been Bearish since the same date.

In the past year, 5Paisa Capital has underperformed the market, generating a return of only 13.00% compared to the market's (BSE 500) return of 34.48%. However, the company has shown strong long-term fundamental strength with a 34.62% CAGR growth in Operating Profits. Its Net Sales have also grown at an annual rate of 37.04% and Operating Profit at 34.62%.

In the latest quarter, 5Paisa Capital has shown positive results with its PBDIT(Q) at the highest of Rs 38.48 crore, OPERATING PROFIT TO NET SALES(Q) at the highest of 38.18%, and PBT LESS OI(Q) at the highest of Rs 29.26 crore. With a ROE of 10.9, the company has a fair valuation with a 2.8 Price to Book Value. However, over the past year, while the stock has generated a return of 13.00%, its profits have only risen by 6.5%. This results in a PEG ratio of 5.3 for the company.

One positive aspect for 5Paisa Capital is its high institutional holdings at 22.95%. These investors have better capability and resources to analyze the fundamentals of companies compared to most retail investors. Overall, while the stock may have underperformed in the past year, it has shown strong long-term growth potential and has the support of institutional investors.