Reliable Data Services Ltd Valuation Shifts: Price Attractiveness Reassessed Amid Market Volatility

Valuation Metrics: A Closer Look

Reliable Data Services currently trades at ₹153.35, down 4.99% from its previous close of ₹161.40, with a 52-week high of ₹175.35 and a low of ₹60.10. The company’s P/E ratio stands at 14.49, a figure that has contributed to its revised valuation grade from very attractive to attractive as of 6 February 2026. This P/E is notably lower than several peers in the NBFC and technology-related sectors, signalling a relatively reasonable price for the earnings generated.

In terms of price-to-book value, the stock is valued at 2.62, which remains moderate within the sector context. While not as low as some value plays, it suggests that the market still assigns a premium to Reliable Data’s book value, likely due to its consistent return metrics and growth prospects.

Comparative Peer Analysis

When benchmarked against peers, Reliable Data’s valuation appears more attractive. For instance, Sigma Advanced Solutions is rated as 'Risky' with a P/E of 21.59, while InfoBeans Technologies and Blue Cloud Software are classified as 'Expensive' and 'Very Expensive' respectively, with P/E ratios exceeding 27. The highest P/E among peers is Silver Touch at 50.9, indicating a significant premium for growth or speculative factors.

Reliable Data’s EV to EBITDA ratio of 10.06 also compares favourably against peers such as InfoBeans Tech (18.46) and Blue Cloud Soft (19.37), reinforcing the notion that the company is trading at a more reasonable enterprise value relative to earnings before interest, taxes, depreciation and amortisation.

Financial Performance and Quality Metrics

Reliable Data Services boasts a robust return on capital employed (ROCE) of 15.39% and a return on equity (ROE) of 19.67%, underscoring efficient capital utilisation and shareholder value creation. These figures support the company’s valuation, suggesting that despite the recent price correction, the underlying business fundamentals remain strong.

The PEG ratio of 0.47 further indicates that the stock is undervalued relative to its earnings growth potential, a positive sign for long-term investors seeking growth at a reasonable price.

Stock Performance Relative to Market Benchmarks

Over the past year, Reliable Data Services has delivered an impressive stock return of 127.19%, vastly outperforming the Sensex’s 9.66% gain over the same period. Year-to-date, the stock has returned 5.25%, while the Sensex has declined by 2.28%. However, in the short term, the stock has seen a 3.4% decline over the past week, compared to a 0.94% drop in the Sensex, reflecting some recent profit-taking or sector-specific pressures.

This strong long-term performance, coupled with a valuation that remains attractive relative to peers, suggests that the stock continues to offer value despite recent volatility.

Market Capitalisation and Mojo Score Insights

Reliable Data Services holds a Market Cap Grade of 4, indicating a mid-sized market capitalisation within its sector. Its current Mojo Score is 68.0, with a Mojo Grade downgraded from Buy to Hold on 6 February 2026. This downgrade reflects a more cautious stance by analysts, likely influenced by the recent price correction and the shift in valuation grade. The Hold rating suggests investors should monitor developments closely while recognising the company’s solid fundamentals.

Valuation Trends and Investor Implications

The transition from a very attractive to an attractive valuation grade signals a subtle but important shift in investor sentiment. While the stock remains reasonably priced, the narrowing margin of valuation appeal suggests that some of the earlier undervaluation has been corrected by recent price appreciation.

Investors should note that the P/E ratio of 14.49 is still below many peers, indicating that Reliable Data Services is not overvalued relative to its earnings. The PEG ratio below 0.5 further supports the thesis that the stock offers growth potential at a fair price. However, the recent downgrade to a Hold rating advises caution, as the market may be pricing in near-term risks or sector headwinds.

Given the company’s strong ROCE and ROE, alongside a stable EV to EBITDA ratio, the fundamentals remain intact. This balance of solid financial health and a more tempered valuation suggests that Reliable Data Services could be a suitable holding for investors with a medium to long-term horizon, particularly those seeking exposure to the NBFC sector with a focus on quality and value.

Sector Context and Broader Market Considerations

The NBFC sector has faced mixed fortunes recently, with regulatory changes and macroeconomic factors influencing investor appetite. Reliable Data’s valuation and performance metrics position it favourably within this environment, especially when compared to riskier or more expensive peers. Its moderate price-to-book ratio and consistent returns highlight resilience amid sector volatility.

Investors should continue to monitor sector developments, including interest rate movements and credit demand trends, which could impact earnings and valuation multiples going forward.

Conclusion

Reliable Data Services Ltd’s recent valuation shift from very attractive to attractive reflects a maturing market view of the stock’s price and earnings relationship. Despite a short-term price dip, the company’s strong financial metrics and relative valuation compared to peers maintain its appeal. The downgrade to a Hold rating signals prudence but does not diminish the stock’s potential for investors seeking a balanced combination of growth and value in the NBFC sector.

As always, investors should weigh these factors alongside broader market conditions and individual risk tolerance before making investment decisions.

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