Paisalo Digital is Anand Rathi's stock pick of the month for December, 20% upside seen; should you buy?

Breakout stocks: Shares of Paisalo Digital Ltd, a non-deposit-taking non-banking financial company, closed 2.83 per cent higher at ₹60.30 on Wednesday against the previous close of ₹58.64 on BSE. Brokerage firm Anand Rathi Investment Services sees a 20.6 per cent upside for Paisalo Digital shares. The brokerage firm, in an official report released on Wednesday, shortlisted Paisalo Digital stock as its pick of the month. 

According to the report, the stock has corrected 78.6 per cent from its previous market rally and turned from its 50-month moving average.

“This retracement coincides with a major rising trend line,” Anand Rathi analysts noted in the report.

Market expert overview

Sugandha Sachdeva, the founder of SS WealthStreet, also pointed out that the stock had witnessed a sharp rebound from its October lows, which were close to the ₹40 mark. The strong volumes during the recovery rally show investor interest in the shares while the stock attempts to sustain above its 200-day exponential moving average (DEMA) zone.

“Shares of Paisalo Digital have rebounded sharply from their October lows near the ₹40 mark, surging nearly 40 per cent. The stock has formed a double-bottom pattern on the monthly charts at this key level, signalling the potential for continued upside,” Sachdeva stated.

“Strong volumes during the recovery rally reflect robust investor interest, and the stock is attempting to sustain above its 200-day exponential moving average (DEMA). The formation of higher highs on weekly charts and momentum indicators further reinforces the positive trend,” the stock market expert said.

Stocks to Buy
 

Paisalo Digital Ltd (PAISALO): Buy at ₹54-58; Target price at ₹70; Stop Loss at ₹49.

About Paisalo Digital

Paisalo Digital was incorporated in 1992 as SE Investment Limited. In 2018, the non-banking financial company's name was changed to Paisalo Digital.

The non-banking lender specialises in providing various financial products, such as business loans, SME and MSME loans, income generation loans for business or self-employment reasons, etc. The NBFC operates through three divisions: Financial Services division, Micro-credit division, and Alternate Energy division.

The company's core financial service division extends loans for motor vehicles, personal loans, business loans, and loans against property to individuals and corporate bodies.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before making any investment decisions.