LIC-backed multibagger penny stock below Rs 50: Ready for an IREDA-like move? Trading at low PE with high dividend yield!

Drawing parallels to the meteoric rise witnessed by the recently listed Indian Renewable Energy Development Agency Ltd (IREDA)

In the unpredictable dance of the stock market, Wednesday witnessed a compelling performance by Nifty, executing a remarkable rebound from the day's low and concluding with a flat yet positive bias. The charts unveiled the formation of a Dragonfly Doji candlestick pattern, signaling a potential resurgence towards the coveted 21,000/21,100 levels in the sessions to come.

Nifty, commenced the day with a modest uptick but swiftly lost momentum, spiraling down to touch an intraday low of 20,770 in the afternoon. However, in a dazzling display of resilience, it orchestrated a swift recovery in the final hours of trading, reclaiming all lost ground to culminate with a modest 20-point gain at 20,926.

Amidst this financial spectacle, one standout performer took center stage on Wednesday – PTC India Financial Services Ltd (PFS).

PFS, a Non-Banking Financial Company (NBFC) registered with the RBI and boasting the coveted status of an Infrastructure Finance Company, stole the show by hitting an upper circuit limit of 20 per cent during intraday trading. This stellar performance propelled the stock to a fresh 52-week high of Rs 41.52, ultimately settling at Rs 41.47, reflecting a formidable surge of 19.86 per cent on the BSE.

This formidable upswing witnessed a decisive breakout from a five-week consolidation pattern, painting a promising picture on the daily chart. Trading above all key moving averages, with long-term indicators aligning in an upward trajectory, PFS exudes bullish momentum. The 14-period daily Relative Strength Index (RSI) resides comfortably in the super bullish zone, recording a fresh swing high, while the daily Moving Average Convergence Divergence (MACD) maintains a northward trajectory above its nine-period average, reinforcing the positive sentiment.

The trend strength, as indicated by the Average Directional Index (ADX), stands at a robust level above 35, affirming the stock's strength in the market. The configuration of +DI soaring above -DI and ADX suggests a compelling bullish narrative.

Adding intrigue to the narrative is the substantial stake held by the behemoth Life Insurance Corporation of India, boasting 13,547,168 shares, equivalent to a 2.11 per cent stake in PFS. Factor in the attractive dividend yield of 2.40 per cent and a reasonable stock valuation at 15.7x, and the allure of PFS grows stronger.

In the wake of this formidable rally, market participants are drawing parallels to the meteoric rise witnessed by the recently listed Indian Renewable Energy Development Agency Ltd (IREDA), which evolved into a multibagger. PFS, too, has delivered a stellar performance in the last year, registering an impressive jump of nearly 106 per cent. The burning question lingers – could PFS replicate the success of IREDA? Only time will unveil this financial tale; however, with a robust price structure and compelling volume activity, investors and traders alike would be wise to keep a vigilant eye on this captivating stock.

Disclaimer: The article is for informational purposes only and not investment advice.