Coral India Finance & Housing's Stock Upgraded to 'Hold' After Impressive Results

Coral India Finance & Housing, a microcap finance company, has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on February 6, 2024. This upgrade comes after the company declared very positive results for the quarter ending September 23, with a growth in net sales of 118.25%. In fact, the company has consistently shown positive results for the last four quarters.
The company's net sales for the half year have grown at an impressive rate of 110.74%, while its operating cash flow for the year is at its highest at Rs 21.95 crore. This has led to the stock being in a bullish range, with its technical trend improving from mildly bullish on February 5, 2024. The MACD and KST technical factors also indicate a bullish trend for the stock.

Majority shareholders of Coral India Finance & Housing are its promoters, which is a positive sign for investors. The stock has also shown market-beating performance in the long term, generating 88.36% returns in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak, with an average return on equity (ROE) of 10.17%. Its net sales and operating profit have only grown at an annual rate of 16.76% and 5.61%, respectively. Additionally, with a ROE of 14.3, the stock is currently trading at a very expensive valuation with a price to book value of 1.5. However, it is still trading at a discount compared to its average historical valuations.

Despite its expensive valuation, the stock has shown strong growth in profits, with a 68.6% increase in the past year. This has resulted in a PEG ratio of 0.2, indicating that the stock may still have potential for growth. Overall, while Coral India Finance & Housing may not be a top pick for long-term investors, it may still hold potential for short-term gains.