Aarey Drugs & Pharmaceuticals Receives 'Hold' Rating After Positive Financial Results

Aarey Drugs & Pharmaceuticals, a microcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on May 21, 2024. This upgrade comes after the company declared positive results in December 2023, breaking a streak of 7 consecutive negative quarters.
The company's net sales for the quarter have shown a growth of 22.43%, reaching Rs 76.48 crore. Additionally, its PBDIT for the quarter has also reached its highest at Rs 2.71 crore, with operating profit to net sales ratio at 3.54%. These positive financial indicators have contributed to the 'Hold' rating.

Technically, the stock is currently in a mildly bullish range, with an improved trend from sideways on May 14, 2024. Since then, the stock has generated a return of -2.08%. The MACD and KST technical factors also show a bullish trend.

With a ROCE of 2.3, the stock is considered to have an attractive valuation, with an enterprise value to capital employed ratio of 1.1. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 81.66%, while its profits have risen by 59.3%. The PEG ratio of the company stands at 0.5.

The majority shareholders of Aarey Drugs & Pharmaceuticals are the promoters, indicating their confidence in the company's performance. The stock has also outperformed the market (BSE 500) with a return of 81.66% in the last year, compared to the market's return of 36.54%.

However, the company's long-term fundamental strength is weak, with a -38.02% CAGR growth in operating profits over the last 5 years. The return on equity (average) is also low at 6.74%, indicating low profitability per unit of shareholders' funds.

Overall, Aarey Drugs & Pharmaceuticals has shown positive growth in its recent financial results, leading to a 'Hold' rating from MarketsMOJO. While the stock has outperformed the market in the past year, its long-term fundamental strength is weak. Investors are advised to carefully consider these factors before making any investment decisions.