Why is Rajputana Investment & Finance Ltd falling/rising?

Recent Price Movement and Market Comparison

The stock has been under pressure over the past week and month, with returns of -10.39% and -11.54% respectively, markedly worse than the Sensex’s corresponding declines of -2.43% and -4.66%. Year-to-date, the stock continues to lag, down 11.54% compared to the Sensex’s 4.32% loss. Over the last year, Rajputana Investment & Finance Ltd’s shares have fallen by 14.35%, while the Sensex has gained 6.56%. This persistent underperformance highlights the challenges the company faces in regaining investor confidence.

Technical Indicators and Trading Activity

On the day of the decline, the stock touched an intraday low of ₹34, representing a 6.85% drop from previous levels. The weighted average price indicates that most trading volume occurred near this low, signalling selling pressure. Additionally, the stock is trading below all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, which typically suggests a bearish trend. Investor participation has also waned, with delivery volumes on 22 Jan falling by 86.59% compared to the five-day average, indicating reduced conviction among shareholders.

Fundamental Weaknesses Weighing on the Stock

Rajputana Investment & Finance Ltd’s long-term fundamentals remain weak, which is a key factor behind the stock’s decline. The company’s average Return on Equity (ROE) stands at a modest 5.28%, reflecting limited profitability relative to shareholder equity. Operating profit growth has been sluggish, expanding at an annual rate of just 4.90%, which is insufficient to drive meaningful shareholder value creation. Furthermore, the company reported flat financial results in September 2025, signalling stagnation in its core operations.

Valuation Concerns and Profitability Trends

Despite these weak fundamentals, the stock trades at a premium valuation, with a Price to Book Value ratio of 2.6. This is considered very expensive given the company’s modest ROE of 5.4, suggesting that investors may be overpaying relative to the company’s intrinsic worth. Over the past year, profits have declined by 12%, compounding concerns about the company’s earnings quality and growth prospects. This disconnect between valuation and performance has likely contributed to the recent selling pressure.

Comparative Performance and Market Position

Rajputana Investment & Finance Ltd has underperformed not only the Sensex but also the broader BSE500 index over multiple time frames, including the last three years, one year, and three months. This below-par performance relative to both the market and its sector peers further dampens investor sentiment. The stock’s inability to keep pace with benchmark indices highlights structural challenges and a lack of competitive advantage in its segment.

Investor Outlook and Conclusion

The decline in Rajputana Investment & Finance Ltd’s share price on 23-Jan reflects a confluence of weak financial performance, expensive valuation metrics, and diminished investor participation. The stock’s persistent underperformance against major indices and sector benchmarks underscores the challenges it faces in delivering sustainable growth and returns. While the promoters remain the majority shareholders, this has not translated into positive momentum for the stock in recent months. Investors should carefully weigh these factors when considering exposure to this NBFC microcap, especially given the flat recent results and subdued profitability trends.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →