PNB Housing Finance down 18% from 52-week high; should you buy the dip?

PNB Housing Finance Ltd shares dived 8.12 per cent in Wednesday's trade to hit a low of Rs 724.55. The stock was last seen trading 5.33 per cent lower at Rs 746.55. At this price, it has declined 18.32 per cent from its one-year high price of Rs 913.95, a level seen earlier this year on January 25.

The counter saw heavy trading volume today, indicating that a block deal took place. On BSE, around 1.53 crore shares were last seen changing hands. The figure was way more than the two-week average volume of 20,000 shares. Turnover on the counter came at Rs 1,113.84 crore, commanding a market capitalisation (m-cap) of Rs 19,483.19 crore. Although, the official buyers and sellers of the block deals are not yet known.

On technical setup, support on the counter came at Rs 715 level. And, resistance may be found at Rs 754. With that being said, an analyst said traders can consider buying the stock on dips of around Rs 700 level.

Shiju Koothupalakkal, Technical Research Analyst at Prabhudas Lilladher, said, "As of now, the stock has turned weak. Support will be at Rs 715 level. A decisive breach above Rs 754 level is necessary for a further rise."

Ravi Singh, Senior Vice-President (Retail Research) at Religare Broking, said, "One can consider buying it on dips of around Rs 700 level for an expected near-term target of Rs 780. Keep a strict stop loss placed at Rs 680."

The counter was trading lower than the 5-day, 10-, 20-, 30-, 100-day and 150-day simple moving averages (SMAs) but higher than the 50-day and 200-day SMAs. The counter's 14-day relative strength index (RSI) came at 46.87. A level below 30 is defined as oversold while a value above 70 is considered overbought.

The company's stock has a price-to-equity (P/E) ratio of 13.47 against a price-to-book (P/B) value of 1.83. Earnings per share (EPS) stood at 55.58 with a return on equity of 13.58.

As of March 2024, promoters held a 28.13 per cent stake in the company.