Agarwal Industrial Corporation Receives 'Hold' Rating from MarketsMOJO: A Closer Look at the Factors Behind the Upgrade

Nov 26 2024 06:59 PM IST

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Agarwal Industrial Corporation, a smallcap petrochemicals company, has received a 'Hold' rating from MarketsMojo due to its strong ability to service debt, healthy long-term growth, and attractive valuation. However, recent negative results and decreased institutional investment should be considered. The company has outperformed the market in the last year, but investors should carefully evaluate before investing.

Agarwal Industrial Corporation, a smallcap company in the petrochemicals industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on several factors that indicate a positive outlook for the company.

One of the key reasons for the 'Hold' rating is the company's strong ability to service its debt. With a low Debt to EBITDA ratio of 1.25 times, Agarwal Industrial Corporation is in a good position to manage its debt obligations. Additionally, the company has shown healthy long-term growth, with its Net Sales growing at an annual rate of 28.55% and Operating profit at 40.77%.

From a technical standpoint, the stock is currently in a Mildly Bullish range and has shown improvement since 26-Nov-24. The MACD, a key technical factor, has been Bullish since 26 Nov 2024. Furthermore, the company has a Very Attractive valuation with a ROCE of 21.1 and an Enterprise value to Capital Employed ratio of 2.3. This indicates that the stock is trading at a discount compared to its historical valuations.

However, there are some negative aspects to consider. In the recent quarter, the company has reported negative results, with a significant decrease in interest and net sales, as well as a fall in PBT LESS OI. Additionally, institutional investors have decreased their stake in the company, which may be a cause for concern for some investors.

Despite these challenges, Agarwal Industrial Corporation has outperformed the market in the last 1 year, generating a return of 12.54%. However, this is lower than the market (BSE 500) returns of 27.33%. With a market cap of Rs 1,526 crore and annual sales of Rs 2,297.99 crore, the company is the biggest in its sector and holds a significant share of 31.66%.

Overall, the 'Hold' rating from MarketsMOJO suggests that Agarwal Industrial Corporation has potential for growth, but investors should carefully consider all factors before making any investment decisions.

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