Geojit Financial Services India: Is the Bull Running or Resting?
I. Overall Rating & Recommendation:
Rating: 6.5/10 (Hold with Moderate Optimism)
Recommendation: Geojit offers potential for moderate long-term growth, but near-term uncertainties remain. Holding existing shares is reasonable, while initiating new purchases might be better delayed until the stock demonstrates sustained momentum and macroeconomic headwinds subside.
II. Company Analysis:
Sector: Financial Services (Broking & Distribution)
Market Cap (as of Jan 11, 2024): ₹1,999.24 Crore
Current CMP: ₹83.07
Products: Geojit's primary revenue streams are:
Brokerage commission (65% of revenue)
Distribution of financial products (20% of revenue)
Value-added services and other income (15% of revenue)
Financials:
Recent financial performance shows decent growth in income and profitability.
Debt-to-equity ratio is manageable at 0.27.
P/E ratio is in line with the sector average at 18.15.
Future predictions depend on market stability and expansion of value-added services.
III. Competitive Landscape:
Key competitors include Angel One, ICICI Securities, Motilal Oswal, IIFL, and others.
Geojit faces competition from large established players and discount brokers.
IV. Macroeconomic Factors:
Rising interest rates and market volatility could dampen investor sentiment.
Growth in retail participation in the stock market could benefit Geojit.
Regulatory changes in the financial services sector could impact profitability.
V. Technical Analysis:
Daily chart trend analysis indicates a sideways consolidation near current levels.
Breaking above ₹86.70 (52-week high) could signal a potential uptrend, while falling below ₹78 could lead to further downside.
VI. Future Predictions:
A CAGR of 8-12% could be achievable over the next 5 years if market conditions improve and Geojit successfully expands its client base and revenue streams.
Historical CAGR (past 5 years) for Geojit and its index have been positive, though volatile.
VII. Ratios:
Debt-to-equity ratio: 0.27
Shareholder ratios: ROE: 15.7%, ROA: 11.56%
Sortino ratio: 0.7 (moderately downside sensitive)
PEG ratio: 1.64 (fairly valued)
Price-to-sales ratio: 6.65 (higher than industry average)
Beta: 0.73 (less volatile than NIFTY)
VIII. Conclusion:
Geojit holds value but is not without risks. Monitor market trends, competitor actions, and the company's execution before making investment decisions.
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