Strong Price Momentum and Market Outperformance
Reliable Data’s stock has demonstrated impressive momentum over recent periods. In the past week alone, the share price surged by 8.86%, significantly outpacing the Sensex’s marginal 0.10% gain. Over the last month, the stock appreciated 4.08%, again outperforming the benchmark’s 1.11% rise. Most strikingly, the year-to-date return stands at an extraordinary 108.40%, dwarfing the Sensex’s 9.70% increase. Even on a one-year horizon, Reliable Data’s 78.39% return far exceeds the Sensex’s 6.84% gain, underscoring its market-beating performance.
Today’s trading session saw the stock reach an intraday high of Rs 148.05, marking a 5% increase on the day. The stock has been on a three-day consecutive gain streak, accumulating a 10.49% return during this period. Furthermore, Reliable Data is trading above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling strong technical support and bullish investor sentiment.
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Robust Financial Performance Driving Investor Confidence
The stock’s rise is underpinned by Reliable Data’s strong fundamental performance. The company has reported positive results for four consecutive quarters, reflecting consistent operational strength. Notably, its net sales have grown at an annualised rate of 45.06%, signalling healthy top-line expansion.
Profitability metrics further reinforce the company’s growth story. The latest six-month period saw a 53.13% increase in profit after tax (PAT), reaching Rs 3.92 crores. Similarly, profit before tax excluding other income (PBT less OI) for the quarter rose by 74.14% to Rs 3.03 crores. These figures highlight the company’s ability to convert sales growth into substantial profit gains.
Operational efficiency is also evident from the company’s debtors turnover ratio, which stands at a high 2.10 times for the half-year, indicating effective management of receivables and working capital.
Reliable Data’s return on capital employed (ROCE) of 15.4% is attractive, especially when coupled with an enterprise value to capital employed ratio of 2. This valuation metric suggests the stock is trading at a discount relative to its peers’ historical averages, making it an appealing proposition for value-conscious investors.
Over the past year, while the stock price has appreciated by 78.39%, the company’s profits have surged by an even more impressive 140.2%. This disparity results in a very low price/earnings to growth (PEG) ratio of 0.1, indicating the stock may be undervalued relative to its earnings growth potential.
Market Leadership and Shareholder Confidence
The company’s majority shareholding by promoters provides stability and confidence to the market. This ownership structure often aligns management’s interests with those of shareholders, fostering long-term value creation.
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Despite a recent decline in delivery volume by 93.74% compared to the five-day average, the stock remains sufficiently liquid for typical trade sizes, supporting continued investor participation. The weighted average price indicates that more volume was traded near the lower end of the day’s price range, suggesting some profit-taking or cautious positioning, but this has not deterred the overall upward trend.
Conclusion: Why Reliable Data is Rising
Reliable Data Services Ltd’s share price appreciation on 27-Nov and over recent periods is primarily driven by its strong financial results, consistent profit growth, and attractive valuation metrics. The company’s ability to outperform the broader market and its sector, combined with solid operational efficiency and promoter backing, has bolstered investor confidence. These factors collectively explain the stock’s sustained rise and market outperformance, making it a noteworthy contender in its segment.
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