Quality Assessment: Robust Growth and Profitability
Reliable Data Services has demonstrated impressive operational and financial quality over recent quarters. The company reported net sales of ₹69.13 crores for the quarter ending Q2 FY25-26, reflecting a staggering annual growth rate of 191.56%. This surge in top-line performance is complemented by a strong profitability trajectory, with Profit After Tax (PAT) for the latest six months reaching ₹3.92 crores, up 53.13% year-on-year. Additionally, Profit Before Tax excluding other income (PBT less OI) stood at ₹3.03 crores, growing 74.14% annually.
Return on Capital Employed (ROCE) remains healthy at 15.4%, signalling efficient utilisation of capital and operational strength. These metrics underpin the company’s quality upgrade, reflecting a business model that is scaling profitably and sustainably.
Valuation: Attractive Relative to Peers
The valuation profile of Reliable Data Services has become increasingly compelling. The stock trades at an enterprise value to capital employed ratio of 2.1, which is considered very attractive within the NBFC sector. This valuation discount relative to peers’ historical averages suggests the market has yet to fully price in the company’s growth potential.
Moreover, the company’s Price/Earnings to Growth (PEG) ratio stands at a remarkably low 0.1, indicating that earnings growth significantly outpaces the stock price appreciation, a classic hallmark of undervaluation. Over the past year, the stock price has surged by 135.82%, vastly outperforming the BSE500 index return of 9.89%, yet the valuation remains reasonable given the strong fundamentals.
Financial Trend: Sustained Momentum and Market-Beating Returns
Reliable Data Services has exhibited a consistent upward financial trend, with net sales and profits growing at double-digit rates. The company’s year-to-date return of 7.55% contrasts favourably with the Sensex’s decline of 3.37% over the same period. Over the last month, the stock gained 6.6% while the Sensex fell 3.17%, and in the last week, the stock soared 8.37% compared to the Sensex’s modest 0.53% rise.
Longer-term returns are even more impressive, with a one-year return of 135.82% dwarfing the Sensex’s 8.49%. This market-beating performance is supported by a 140.2% increase in profits over the same period, underscoring the company’s ability to convert growth into shareholder value.
Turnaround taking shape! This Small Cap from NBFC sector just hit profitability with strong business fundamentals showing up. Catch it before the major breakout happens!
- - Recently turned profitable
- - Strong business fundamentals
- - Pre-breakout opportunity
Technical Analysis: Shift to Bullish Momentum
The technical grade for Reliable Data Services has been upgraded from mildly bullish to bullish, reflecting a positive shift in market sentiment and momentum indicators. The daily moving averages are firmly bullish, supporting the recent price appreciation from ₹149.25 to ₹156.70 on 29 January 2026, a 4.99% gain on the day.
Weekly technical indicators present a mixed but improving picture: the Moving Average Convergence Divergence (MACD) remains mildly bearish on the weekly chart but is neutral on the monthly. The Relative Strength Index (RSI) shows no clear signal on both weekly and monthly timeframes, suggesting room for further momentum development.
Bollinger Bands on the weekly chart are bullish, indicating price strength and potential continuation of the upward trend. The On-Balance Volume (OBV) is mildly bullish weekly and bullish monthly, signalling accumulation by investors. Dow Theory readings are mildly bearish weekly but bullish monthly, suggesting that longer-term trends are positive despite short-term fluctuations.
Overall, the technical upgrade reflects a growing conviction among traders and investors that the stock is entering a sustained uptrend phase, supported by volume and price action.
Risks: Promoter Stake Reduction
Despite the positive outlook, investors should be mindful of certain risks. Notably, promoter confidence appears to be waning, with promoters reducing their stake by 3.98% in the previous quarter. Currently, promoters hold 67.79% of the company’s shares. This reduction could signal concerns about future prospects or a strategic reallocation of holdings, which may weigh on sentiment if the trend continues.
Investors should monitor promoter activity closely alongside operational performance to gauge the sustainability of the current momentum.
Get the full story on Reliable Data Services Ltd! Our detailed research dives into fundamentals, sector comparison, technical analysis, and valuations for this Non Banking Financial Company (NBFC) micro-cap. Make informed decisions!
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Market Context and Outlook
Reliable Data Services operates within the NBFC sector, which has been under pressure due to macroeconomic uncertainties and regulatory changes. However, the company’s strong financial results and technical momentum set it apart from many peers. Its market capitalisation grade of 4 indicates a mid-sized company with growth potential but also some volatility risk.
The stock’s 52-week high of ₹173.00 and low of ₹60.10 illustrate significant price appreciation over the past year, reflecting the company’s turnaround and investor enthusiasm. The current price of ₹156.70 is approaching the upper range, supported by bullish technical signals.
Given the company’s strong earnings growth, attractive valuation, and improving technicals, the upgrade to a Buy rating is well justified. Investors seeking exposure to a high-growth NBFC with improving fundamentals may find Reliable Data Services an appealing addition to their portfolios, albeit with attention to promoter stake movements and sector risks.
Summary of Rating Change
The MarketsMOJO Mojo Score for Reliable Data Services has increased to 74.0, reflecting the upgrade from a Hold to a Buy rating as of 28 January 2026. This change is driven primarily by the technical grade improvement from mildly bullish to bullish, alongside strong financial trends and attractive valuation metrics. The company’s inclusion in thematic lists focusing on turnaround and growth stocks further supports investor interest.
In conclusion, Reliable Data Services Ltd’s upgrade signals confidence in its sustained growth trajectory, market-beating returns, and technical strength, making it a noteworthy contender in the NBFC space for 2026.
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