Asahi Songwon Colors Receives 'Hold' Rating After Strong Quarterly Results

Asahi Songwon Colors, a microcap company in the dyes and pigments industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared positive results for the last three consecutive quarters.
In the last quarter, the company's profits after tax have grown by an impressive 128.0%, reaching Rs 3.84 crore. Additionally, its return on capital employed (ROCE) for the half-year period is at its highest at 5.95%. The net sales for the quarter have also reached a record high of Rs 141.61 crore.

Technically, the stock is in a mildly bullish range with multiple factors such as MACD, KST, and OBV indicating a bullish trend. With an ROCE of 5.3, the company's valuation is attractive with a 1.5 enterprise value to capital employed. Moreover, the stock is currently trading at a discount compared to its average historical valuations.

In the past year, Asahi Songwon Colors has outperformed the market with a return of 60.26%, while its profits have risen by 146.8%. This has resulted in a low PEG ratio of 0.3, indicating a potential undervaluation of the stock.

The majority shareholders of the company are promoters, which can be seen as a positive sign for investors. However, the company's long-term fundamental strength is weak with a -138.91% CAGR growth in operating profits over the last five years. It also has a high debt to EBITDA ratio of 7.64 times, indicating a low ability to service debt. The return on equity (avg) of 6.88% also signifies low profitability per unit of shareholders' funds.

Overall, Asahi Songwon Colors has shown a market-beating performance in the past year and has received a 'Hold' rating from MarketsMOJO. While the company's short-term performance looks promising, its long-term fundamentals need to be closely monitored by investors.