Nahar Capital & Financial Services Receives 'Hold' Rating After Strong Quarter Results

Nahar Capital & Financial Services, a microcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared very positive results for the quarter ending September 24, with a growth in net profit of 83.48%. This is the second consecutive quarter of positive results for the company.
One of the key factors contributing to the 'Hold' rating is the company's strong operating cash flow, which was the highest at Rs -10.67 crore. Additionally, the company's PBT (profit before tax) less OI (other income) has grown by a whopping 882.9%, while its PAT (profit after tax) has grown by 63.0%.

From a technical standpoint, the stock is currently in a bullish range and the trend has improved from mildly bullish on November 22, 2024. Multiple technical indicators such as MACD, Bollinger Band, and OBV are also showing bullish signals for the stock.

However, the company's long-term fundamental strength is weak with an average return on equity (ROE) of 6.99%. Its current ROE of 1.9 indicates a very expensive valuation with a price to book value of 0.3. This is also higher than the company's average historical valuations.

In the past year, while the stock has generated a return of 12.32%, its profits have only risen by 30.4%. This gives the company a PEG ratio of 0.6, which suggests that the stock may be overvalued.

It is also worth noting that despite its size, domestic mutual funds hold only 0.03% of the company. This could indicate that they are not comfortable with the current price or the business of the company.

Overall, Nahar Capital & Financial Services has underperformed the market in the last year, with a return of 12.32% compared to the market's return of 25.57%. While the recent positive results and technical indicators may be promising, investors should carefully consider the company's weak fundamental strength and expensive valuation before making any investment decisions.