Is sreestha is a good buy


Aime
Srestha Finvest Ltd. does not appear to be a good buy at the moment. Here's why:
- Financial Performance: Srestha Finvest reported a net profit of Rs 5.06 crore for the quarter ending March 2024, which is a growth of 209.7% year-on-year1. However, this growth is not indicative of the company's overall financial health, as it is followed by a decline in net profit in the subsequent quarter.
- Profitability Concerns: The company's profit margin (PAT margin) is negative at -181.0673%, and the net profit is negative at -4.9741 crore for the year ending March 20232. This indicates that the company is not generating profit from its operations.
- Return on Equity (ROE) and Earnings Per Share (EPS): The ROE is negative at -12.7405% for the latest year2, and the EPS has declined significantly by 2975.5102% year-on-year2. These metrics suggest that the company is not generating returns on shareholders' equity effectively.
- Valuation Concerns: Srestha Finvest is trading at a high price-to-book (P/B) ratio of 0.9436, which is higher than its historical average P/B of 1.314222. This suggests that the stock may be overvalued based on the latest financial data.
- Technical Analysis: The company's stock price has experienced a significant increase, with a 4.90% rise in a single day3. This volatility could be indicative of market speculation or a lack of fundamental support for the stock price.
- Market Sentiment: The stock is considered overvalued by 74% compared to the current market price of 2.12 INR4. This sentiment is supported by the negative net income and declining EPS, indicating that the company is not generating profits effectively.
In conclusion, given the negative profitability metrics, declining EPS, and overvaluation concerns, Srestha Finvest Ltd. does not appear to be a good buy at this time. Investors should consider these factors and the company's future prospects before making an investment decision.
Source:
z
1.
Q4 Results: Srestha Finvest reports net profit of Rs 5.06 crore
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