Salasar Techno share is in Momentum

Technical Analysis:

Salasar Techno share is in bullish momentum and ready to move upward after consolidation at a range of 240 to 250 levels. The stock has strong support at the 230 level on the daily chart. Salasar Techno has formed a “W” pattern and is trying to break its previous swing high. It is trading above the 250 level despite the downward trend in the broader market. The stock is also trading above all its moving averages with strong volume.

On the daily chart, all short-term moving average lines (9 EMA, 13 EMA, and 21 EMA) of Salasar Techno crossed medium-term moving average (50 EMA) at the 250 level. The stock closed above 200 EMA. That shows clear strength on the counter and gives a buy signal for the short to the medium term provided broader market bounce or stabilize at this level.

Salasar Techno stock has shown RSI positive divergence both in daily and weekly charts at 240 levels. SALASAR is looking strong both in the weekly and monthly chart and ready for an upward movement. Once it crossed its previous swing high of 296 level strongly, the stock can reach its all-time high of 360 level within a short period.

Fundamental Analysis:

Salasar is a small cap company with a market cap of INR 731 crores, The face value of Salasar techno share is INR 10. The company operates in the industrial capital goods industry. Additionally, the stock is trading at 22 PE and 2.7 Price to book value. Further the return on capital employed is 13%. Return on equity is 11.8%. Both these parameters seem strong in valuation.

The company has approved the sub-division of each equity share with a face value of INR 10. The face value will be INR 1 after the division. The record date for the same is June 28, 2022.

Salasar’s total revenue grew by ~19% in FY22 to reach INR 721 crores against the previous year of INR 606.7 crores. In the financial year 2022, the company reported a 6 percent rise in the net income. The net income of the company increased to INR 31.45 crore in FY2022 from INR 29.65 crore in the previous year.

Recently, Salasar Techno Engineering got orders worth INR 1,182 cr in FY22. Its overall order book in 2020-21 was Rs 988 crore. Further, the company has completed the installation of four towers of 15 meters in height at the Goa international airport.

The counter looks strong both technically and fundamentally with the strong tailwind of orders in its bag. If the stock moves down along with the broader market, it will be the right time to buy at a low level and hold for the long term.

Salasar Techno Daily chart
Salasar Techno Weekly chart

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