What should investors do with this fundamentally strong smallcap NBFC stock?

What should investors do with this fundamentally strong smallcap NBFC stock?

Indian Market
by 5paisa Research Team Last Updated: 2022-11-15T11:58:32+05:30

The stock of Arman Financial Services has doubled its value on a YTD basis.

The year 2022 has been a rollercoaster ride for the Indian stock market so far, led by globally induced-volatility, high valuations, and geopolitical tensions. Despite these factors, quality midcap and smallcap stocks have witnessed strong buying interest throughout the season and have been trending among investors lately. Meanwhile, the stock of Arman Financial Services is one such smallcap stock, which has nearly doubled its value this year.

Arman Financial Services (NSE Code- ARMANFIN) is primarily engaged in the lending business which includes term loans, collateral-free credit, other forms of credit, savings, and insurance. Main activities are engaged in rural and semi-rural regions of India. In its recent quarterly results, the company posted a 56% YoY jump in revenue, which stood at Rs 21.31 crore, while net profit grew massively by 222% YoY to Rs 6.72 crore in June 2022.

Technically, the stock jumped nearly 6% during Tuesday’s trading session and has hit a fresh all-time high of Rs 1705 level on the NSE. A huge spurt in volume was observed as volume stood greater than the 30-day and 50-day average volume. After a short consolidation period, the stock has registered a good price volume breakout. All its moving averages are in an uptrend. The 14-period daily RSI (73.74) is in super bullish territory and shows strong strength in the stock. The 14-period ADX (27.09) also indicates strong trend strength. The OBV is at its peak and indicates strong volumetric strength. The Elder Impulse system has indicated a fresh buy in the stock. The Relative Strength (RS) shows strong outperformance of the stock as against the broader market. In a nutshell, the stock marks all the positive signs and is expected to continue its bullish track in times to come.

With the stock being technically strong and fundamentally sound, investors should include it in their watchlist to track its further progress.

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