PFC Stock Upgraded to 'Buy' by MarketsMOJO, Shows Strong Financial Performance

Power Finance Corporation (PFC) has recently caught the attention of investors as its stock call has been upgraded to 'Buy' by MarketsMOJO on May 13, 2024. This largecap company in the finance/NBFC industry has shown positive results for the last four consecutive quarters, with a growth of 22.64% in its PAT (HY) at Rs 9,560.48 crore and the highest net sales (Q) at Rs 23,571.83 crore. Additionally, its cash and cash equivalents (HY) have also reached a record high of Rs 11,424.27 crore.
The stock is currently in a bullish range and its technical trend has improved from mildly bullish to bullish on May 13, 2024. This is supported by multiple factors such as MACD, KST, DOW, and OBV. Furthermore, the company has a high institutional holding of 35.46%, indicating that these investors have better capabilities and resources to analyze the fundamentals of the company compared to retail investors.

PFC has also shown a market-beating performance, with a return of 216.47% in the last year, significantly higher than the market (BSE 500) returns of 31.64%. However, there are some risks associated with investing in PFC. The company has a weak long-term fundamental strength, with a CAGR growth of only 9.62% in net sales. This could potentially impact its long-term growth prospects.

Moreover, PFC has an expensive valuation with a price to book value of 1.5 and a ROE of 19.2. However, it is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a high return, its profits have only increased by 30.5%, resulting in a low PEG ratio of 0.2.

In conclusion, PFC is a company with strong financial performance and a bullish trend in the stock market. However, investors should also consider the potential risks associated with its long-term growth and valuation before making any investment decisions.