Why is Nuvama Wealth falling/rising?

As of 27-Oct, Nuvama Wealth Management Ltd's stock price is rising, currently at 7,422.00, reflecting an increase of 252.2 (3.52%). The stock has shown a positive trend today, outperforming its sector by 3.24% and reversing a two-day decline. It reached an intraday high of Rs 7,438.45, indicating strong momentum. Over the past week, the stock has gained 5.61%, and in the last month, it has surged by 21.28%, significantly outperforming the Sensex, which rose by only 5.41%. The company's strong long-term fundamentals, highlighted by a robust average Return on Equity (ROE) of 28.26% and impressive growth in net sales and operating profit, contribute positively to its recent price movement. However, the stock's valuation appears expensive, with a Price to Book Value of 7.7, and a significant portion of promoter shares (62.8%) is pledged, which could pose risks in a declining market.
In the broader market context, Nuvama's short-term performance has outpaced the benchmark, with a 5.61% increase over the past week compared to the Sensex's 0.49% rise. This outperformance is indicative of strong investor confidence in the company's fundamentals despite the noted risks. The stock's liquidity remains adequate for trading, although there has been a decline in investor participation, as evidenced by a 29.28% drop in delivery volume against the five-day average. Overall, while the stock is experiencing upward momentum, the high valuation and pledged shares present potential challenges that investors should consider.