PFC downgraded to 'Hold' by MarketsMOJO due to technical position and weak long-term growth potential

Power Finance Corporation (PFC) has recently been downgraded to a 'Hold' by MarketsMOJO, a leading financial analysis platform. This decision was based on various factors, including the company's financial performance and market trends.
PFC, a largecap finance and NBFC company, has been consistently delivering positive results for the past four quarters. Its profits after tax (HY) have grown at an impressive rate of 22.64%, with the highest net sales (Q) of Rs 23,571.83 crore and cash and cash equivalents (HY) of Rs 11,424.27 crore.

However, despite these positive results, MarketsMOJO has downgraded the stock to a 'Hold' due to its current technical position. The stock is currently in a mildly bullish range, with multiple bullish factors such as MACD, Bollinger Band, and KST. Additionally, with a return on equity (ROE) of 19.2, the stock is fairly valued with a price to book value of 1.5.

One of the main reasons for the downgrade is the stock's poor long-term fundamental strength. PFC has only shown a 9.62% CAGR growth in net sales, indicating weak long-term growth potential. This is further supported by the fact that while the stock has generated a high return of 236.21% in the last year, its profits have only increased by 30.5%. The PEG ratio of the company is also at a low of 0.2, indicating a lack of future growth potential.

Another factor contributing to the downgrade is the high institutional holdings of 35.37%. These investors have better resources and capabilities to analyze company fundamentals, and their stake in PFC has increased by 0.63% in the previous quarter.

Despite the downgrade, PFC has still outperformed the market (BSE 500) with a return of 236.21% in the last year, compared to the market's 40.22%. However, with its weak long-term growth potential and fair valuation, MarketsMOJO has advised investors to hold onto their positions in PFC for now.