SBFC Finance jumps 18%, hits new record high as ICRA upgrades outlook to 'stable'

Shares of SBFC Finance surged over 18% to reach an all-time high of ₹104.35 per share on September 23, 2024, following a credit rating upgrade by ICRA. The credit rating agency upgraded the company's long-term, fund-based term loan of ₹2,100 crore to 'AA-' with a stable outlook, up from the previous rating of 'A+'. ICRA also upgraded and withdrew SBFC's long-term, unallocated fund-based bank lines worth ₹1,400 crore, assigning the same 'AA-' stable rating.

This rating signifies very low credit risk and strong confidence in the company's ability to meet its financial commitments on time. The stock saw a substantial increase in trading volume, with approximately 7 crore equity shares exchanging hands on the BSE and NSE, far exceeding the one-week average of 37 lakh shares.

In the June 2024 quarter, SBFC Finance reported a 68% year-on-year increase in net profit, reaching ₹79 crore, up from ₹47 crore in the same period last year. Revenue from operations also increased by 30% YoY to ₹298 crore, compared to ₹229 crore in Q1FY25.

SBFC Finance is a non-deposit-taking NBFC (Non-Banking Financial Company) that primarily caters to entrepreneurs, small business owners, self-employed individuals, and salaried or working-class customers. The company offers secured MSME loans and loans backed by gold, positioning itself as a key lender in this segment.

Currently, four brokerages cover SBFC Finance stock, with three recommending a 'buy' and one suggesting a 'hold'. Despite the recent surge, SBFC Finance's shares have risen by 19% over the past year, underperforming the Nifty 50 index, which grew by 31% during the same period.

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Force Motors Bounces Back: 10% Surge After Recent Slump

Force Motors Limited is making headlines as its shares surged 10% to ₹7,420 on September 20, 2024, marking the largest single-day gain in nearly 50 days. This upward movement comes after a challenging four-day losing streak that left the stock reeling.

Volume Spike
The trading volumes were notably robust, with over 71,000 shares exchanging hands—more than double the average volumes observed in the past week and month, which were around 35,000 shares. This significant activity indicates renewed investor interest, possibly signaling a shift in market sentiment.

Quarterly Profit Boost
The company recently reported a remarkable 69% increase in its quarterly profit, reaching ₹116 crore (approximately $14 million) for the April-June period. This increase was largely driven by rising demand for its commercial vehicles, which also contributed to a 10% jump in share price. Additionally, Force Motors experienced a 27% rise in revenue, totaling ₹1,885 crore, alongside a 10% increase in sales volumes.

Focus on Digital Transformation
In a bid to enhance its operational efficiency, Force Motors announced a collaboration with EY Parthenon India to revamp its digital transformation strategy. This initiative aims to innovate and boost productivity across the company's value chain, implementing advanced digital platforms and solutions for improved customer engagement and enhanced security.

Recent Performance Challenges
Despite the recent bounce, Force Motors' shares have struggled over the past three months, experiencing a nearly 20% decline. The company's latest profit report offers a glimmer of hope for investors, but the broader context of its performance remains a concern.

Outlook
As Force Motors embarks on this digital transformation journey and capitalizes on the recent surge in demand, investors will be closely monitoring the company's ability to maintain this momentum. With its strong quarterly results and renewed investor interest, Force Motors is positioned as a stock to watch in the coming months.

Conclusion: A Stock Rebound Worth Noting
Force Motors' recent recovery is a significant development, especially following a challenging period. While cautious optimism is warranted given the past performance, the company's commitment to innovation and profitability makes it a compelling option for investors looking to navigate the automotive sector.

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