Last Updated on 30/07/2024 by wccexam Desk
A stock is continuously falling in the stock market. However, on Tuesday its shares were trading at Rs 680, up 2 percent. In the last six months, this stock has fallen by 36 percent. Even in 1 year, this stock has fallen by more than 18 percent. Its 52-week high level is Rs 1,243.20. At the same time, the lowest level of 52 weeks is Rs 642 per share.
This company of the finance sector is Spandana Sphoorty Financial Ltd. The market cap of this company has reached Rs 5 thousand crores. This fall in the shares of Spandana Sphoorty Financial Ltd is due to the weak results of the June quarter. Due to the high increase in loan cost, the income of NBFC has been 35 percent less than the estimate.
When to buy these shares?
Amid the sharp cut in the stock, experts have forecast further earnings decline for the NBFC after Q1 results. They cited low valuation for their continued ‘buy’ rating on the stock. This means that they recommend buying it even on further dips.
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ICICI Securities said that we are cutting its earnings estimates by 25 per cent for FY25 and 12 per cent for FY26, factoring in higher debt costs. We maintain buy on Spandana due to its cheap valuation of 1 times its FY26E PBV. We are revising the target price from Rs 1,200 to Rs 950.
Why did the shares fall?
Spandana Sphoorti Financial’s collections declined by 94 per cent quarterly as against 96.5 per cent quarterly due to election-related operational challenges, loss of more employees in states like Madhya Pradesh, Maharashtra, Rajasthan, Telangana and Gujarat impacting timely customer service.
This share will go up to Rs 900
MOFSL brokerage expects Spandana to deliver RoA and RoE of 4.3 per cent and 16 per cent in FY26. It maintains ‘Buy’ with a target price of Rs 830 based on 1.2x FY26E BV. Nuvama has sharply cut its FY25 and FY26 EPS estimates for Spandana Sphoorthy Financial and has a target of Rs 900 per share.
(Note- Before investing in any stock, please consult your market expert.)