Real Touch Finance Receives 'Hold' Rating After Consistent Positive Results

Real Touch Finance, a microcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company has consistently shown positive results for the past 7 quarters. In the last 9 months, the company's net sales have grown by 34.55% to reach Rs 15.42 crore. Additionally, its PBDIT (profit before depreciation, interest, and taxes) and PBT (profit before tax) have also reached their highest levels at Rs 4.80 crore and Rs 1.39 crore respectively.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on October 15, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock.

The majority shareholders of Real Touch Finance are its promoters, which adds to the stability and confidence in the company. It has also consistently outperformed the BSE 500 index in the last 3 years, with a remarkable return of 142.08% in the last 1 year alone.

However, the company's long-term fundamental strength is weak, with an average return on equity (ROE) of 4.34%. Its current ROE of 6.6 indicates a very expensive valuation, with a price to book value of 2.4. This is higher than its average historical valuations, suggesting that the stock is currently trading at a premium.

Despite its impressive returns in the past year, the company's profits have declined by -12.1%. This could be a cause for concern for investors, as it may indicate a potential slowdown in the company's growth.

Overall, while Real Touch Finance has shown promising results in the short term, its long-term fundamentals and expensive valuation may warrant a 'Hold' rating for now. Investors should keep a close eye on the company's future performance before making any investment decisions.