MarketsMOJO Upgrades Angel One to 'Hold' Based on Strong Fundamentals and Consistent Returns

MarketsMOJO has recently upgraded its stock call on Angel One, a largecap finance/NBFC company, to 'Hold'. This decision is based on the company's strong long-term fundamental strength, with an average Return on Equity (ROE) of 40.31%. Additionally, Angel One has shown healthy long-term growth, with an annual growth rate of 57.98% in Net Sales and 84.31% in Operating profit.
The company has also consistently declared positive results for the last 13 quarters, with its latest PAT (HY) at Rs 632.68 crore, showing a growth of 29.71%. Its NET SALES (Q) have also reached a high of Rs 1,405.45 crore. However, the technical trend for the stock is currently sideways, indicating no clear price momentum. It has improved from being mildly bearish on 21-Aug-24 and has generated -0.02% returns since then.

One of the key factors contributing to the 'Hold' rating is the high institutional holdings at 29.38%. These investors have better capability and resources to analyze the fundamentals of companies compared to most retail investors. Moreover, Angel One has consistently outperformed BSE 500 in the last 3 annual periods, along with generating 53.19% returns in the last 1 year.

However, with an ROE of 37, the stock has a very expensive valuation with a Price to Book Value of 8. This means that the stock is trading at a premium compared to its average historical valuations. Additionally, while the stock has generated a return of 53.19% in the past year, its profits have only risen by 28.9%, resulting in a PEG ratio of 1.

Overall, MarketsMOJO's upgrade to 'Hold' for Angel One is based on its strong fundamentals and consistent returns, but the expensive valuation and lower profit growth may be a cause for concern. Investors are advised to carefully consider these factors before making any investment decisions.