Artefact Projects Receives 'Hold' Rating from MarketsMOJO After Positive Results and Bullish Technical Outlook

Artefact Projects, a microcap engineering company, has recently received a 'Hold' rating from MarketsMOJO on March 13, 2024. This upgrade comes after the company reported positive results in December 2023, with a 55.58% growth in net sales and a 77.62% growth in profits. The company's PBT less OI(Q) also reached its highest at Rs 0.74 crore.
Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROCE of 5.3, the stock is attractively valued with a 1 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 95.96%, while its profits have risen by 50.1%. The PEG ratio of the company is 0.2.

The majority shareholders of Artefact Projects are non-institutional investors. The company has a market-beating performance in the long term as well as the near term, outperforming the BSE 500 index in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak with a 0.62% CAGR growth in net sales over the last 5 years. Its ability to service its debt is also weak with a poor EBIT to interest (avg) ratio of 1.45. The company's return on equity (avg) is 5.47%, indicating low profitability per unit of shareholders' funds.

Overall, while Artefact Projects has shown positive growth in recent months and has a bullish technical outlook, its long-term fundamentals and debt-servicing ability may be cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.