Query Board

Investment Horizon : Query-Specific : Subscribers can ask their queries regarding stocks they hold and get our expert guidance. 



RedTape Limited, one of India’s leading fashion and lifestyle brands, has evolved into a comprehensive family fashion destination, boasting over 435 stores nationwide. Despite consistent profitability, the company with a market capitalisation exceeding ` 9,300 crore and a stock price trading at 14.5 times its book value has not declared dividends.

Notably, it has demonstrated improved financial health with a reduced debtor days’ cycle from 35.5 to 18 days and a decrease in working capital requirements from 159 to 87 days. These positive trends are further reflected in the company’s robust quarterly (Q1FY25) and annual (FY24) results.

RedTape is a promising brand with strong financials and growth prospects. Its high PE ratio suggests the stock price may be inflated, indicating a buying opportunity if the price dips. However, the company’s valuation raises questions about its true value. The decision to hold or sell RedTape’s shares depends on individual risk tolerance and investment goals. If you are comfortable with risk and believe in RedTape’s long-term potential, holding could be a good option. If stability is a priority, selling might be a prudent choice. Hence, for the moment we recommend SELL. 

Mahanagar Telephone Nigam Limited (MTNL), a state-owned enterprise established in 1986, is a telecom service provider operating in Delhi, its surrounding National Capital Region, Mumbai, and Thane district. With a mission to deliver top-tier telecommunication services at competitive rates, MTNL gained recognition as a Navratna public sector enterprise in 1997, a distinction awarded to India’s most profitable and professionally managed public enterprises. This BSE Small-Cap company is valued at over ₹3,800 crore. The company’s financial health is questionable.

Despite its market performance, it has accumulated net losses ranging from ₹1,946 crore to ₹3,694 crore in the last decade. Sales have declined by 17.5 per cent over the past five years, while its debt levels are alarmingly high, reflected through its poor interest coverage ratio. The company’s contingent liabilities of ₹8,389 crore and inflated earnings due to ₹576 crore in other income further exacerbate its financial risks. In the absence of strong fundamentals and a clear growth catalyst for the company, it is advisable to consider exiting your position in the stock. While it is tempting to hold on to the shares because of a price surge, it’s essential to prioritise long-term value and potential returns. Hence, we recommend SELL.