Ujjivan Financial Services: Strong fundamentals and bullish technicals make it a 'Hold' for now

Ujjivan Financial Services, a midcap finance company, has recently been downgraded to a 'Hold' by MarketsMOJO on January 10, 2024. This decision was based on the company's strong long-term fundamental strength, with a 37.44% CAGR growth in operating profits. The company has also shown consistent positive results for the past 7 quarters, with its net sales and PBDIT reaching their highest levels at Rs 1,496.22 crore and Rs 965.96 crore respectively.
Technically, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, and OBV indicating a bullish trend. Additionally, with a ROE of 22.9 and a price to book value of 2, the stock is currently trading at an attractive valuation. It is also worth noting that the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, Ujjivan Financial Services has generated a return of 112.02%, outperforming the market (BSE 500) returns of 26.46%. This is also reflected in the company's profits, which have risen by 84.8% during the same period. The PEG ratio of the company is also at a low 0.1, indicating a potential undervaluation.

Furthermore, the company has a high institutional holding of 42.5%, which suggests that these investors have better capabilities and resources to analyze the fundamentals of the company compared to retail investors. Overall, Ujjivan Financial Services has shown a strong market-beating performance and has the potential for long-term growth, making it a 'Hold' for now.