Dharani Finance Receives 'Hold' Rating After Positive Q2 Results and Bullish Technical Trend

Dharani Finance, a microcap finance company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the June 2024 quarter, with a higher PAT of Rs. 0.03 crore and the highest PBDIT of Rs. 0.33 crore. The stock is also technically in a bullish range, with the technical trend improving from mildly bullish on 15th October 2024. This is supported by factors such as MACD, Bollinger Band, and KST.
The majority shareholders of Dharani Finance are non-institutional investors, and the stock has shown market-beating performance in both the long term and near term. In the last year, the stock has generated a return of 71.51%, outperforming the BSE 500 index. This trend has continued over the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak, with an average ROE of 0.76%. Its net sales have also shown poor growth, with an annual rate of -0.96%. Additionally, with an ROE of 1.5, the stock is currently trading at an expensive valuation with a price to book value of 0.5. However, it is still trading at a discount compared to its average historical valuations.

Despite the stock's impressive returns in the past year, its profits have only risen by 26%, resulting in a PEG ratio of 0. This indicates that the stock may be overvalued and investors should exercise caution before making any investment decisions. Overall, while Dharani Finance has shown positive results and a bullish trend, its long-term fundamentals and valuation should be carefully considered before making any investment decisions.