AGI Greenpac downgraded to 'Hold' by MarketsMOJO

AGI Greenpac, a midcap company in the ceramics and allied industry, has recently been downgraded to a 'Hold' by MarketsMOJO. This decision was based on the company's financial performance and technical indicators.
While AGI Greenpac has declared positive results for the last 6 consecutive quarters, with its operating cash flow at a high of Rs 522.52 crore, its PBT less OI has grown at an impressive rate of 56.55% and its PAT has grown at 65.4%. However, the stock is currently in a mildly bullish range and its MACD and KST technical factors are also bullish.

On the valuation front, AGI Greenpac has a very attractive ROCE of 18 and a low enterprise value to capital employed ratio of 2.9. Additionally, the stock is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 191.03%, outperforming the BSE 500 index.

However, there are some concerns regarding the company's ability to service its debt, as it has a high debt to EBITDA ratio of 3.38 times. This could impact its long-term growth potential, as its net sales have only grown at an annual rate of 0.13% over the last 5 years. Furthermore, the company has a low return on equity of 7.98%, indicating low profitability per unit of shareholders' funds.

Despite these concerns, AGI Greenpac has consistently delivered positive returns over the last 3 years and its majority shareholders are the promoters themselves. This could indicate their confidence in the company's future prospects.

In conclusion, while AGI Greenpac has shown strong financial performance and technical indicators, its high debt and low long-term growth could be a cause for concern. Investors are advised to hold onto their positions and monitor the company's performance closely.