Bajaj Hindusthan Sugar Receives 'Hold' Rating After Positive Results, But Long-Term Fundamentals Weak

Bajaj Hindusthan Sugar, a midcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive results in the first half of 2024, with a higher PAT of Rs 35.18 crore and a lowest debt-to-equity ratio of 0.86 times.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 25-Sep-24. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

With a ROCE of 0.3, the stock is fairly valued and has an attractive 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 51.45%, outperforming the market (BSE 500) returns of 40.34%.

However, the company's long-term fundamental strength is weak with a -14.28% CAGR growth in operating profits over the last 5 years. It also has a high debt-to-EBITDA ratio of 18.74 times, indicating a low ability to service debt. The company has also reported losses, resulting in a negative ROE.

Investors should also take note that 100% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets. Overall, while the stock has shown a strong market-beating performance in the past year, its long-term fundamentals and high promoter pledged shares should be considered before making any investment decisions.