Shares of a small-cap non-banking financial company (NBFC) scaled their all-time high levels on Monday, keeping up with the record run in domestic benchmarks. The shadow lending firm is SBFC Finance Ltd and its stock surged 20 per cent to touch its lifetime high value of Rs 105.72. At this price, it has climbed 18.79 per cent in 2024 so far.
The NBFC, in an exchange filing, said CARE ratings upgraded its long-term, fund-based term loan of Rs 2,100 crore to 'AA-' with a stable outlook, from 'A+' stable, earlier.
In addition, the rating agency upgraded and withdrew its long-term, fund-based term loan (unallocated bank lines) of Rs 1,400 crore to 'AA-' with a stable outlook, from 'A+ and a stable outlook, earlier.
For the unversed, CARE's 'AA-' rating indicates that an issuer has low credit risk and offers a high degree of safety to service financial obligations on time.
"The stock is among the top gainers today after the ratings upgrade. As we are entering into the lowering of the interest rate cycle, NBFCs are under focus. Investors can consider this stock from a medium- to long-term perspective," said Kranthi Bathini, director of equity strategy at WealthMills Securities.
On technical setup, immediate support on the counter could be seen at Rs 98. And, resistance may be found at the Rs 106 zone.
"SBFC has witnessed a massive surge during today's session to come out of its slumber phase. The surge was backed by robust volumes, indicating strength in the breakout. The zone of Rs 96 is likely to cushion any blips, while the bullish gap around Rs 92-89 is likely to be seen as strong support. Also, looking at the momentum counter, it seems poised to continue its upward trend in the near period with in-between blips," said Osho Krishan, Senior Research Analyst - Technical & Derivatives at Angel One.
"The stock price is bullish but also very overbought on daily charts with next resistance at Rs 106. Investors should book profits at current levels as a daily close below support of Rs 95 could lead to a downward target of Rs 89 in the near term," said Sebi-registered research analyst AR Ramachandran.
"Support will be at Rs 98 and resistance at Rs 106. A decisive close above Rs 106 level is required for more upside. The expected trading range will be between Rs 95 and Rs 107 for the short term," said Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi.
Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking also echoed similar support and resistance levels.