Brahmaputra Infrastructure Receives 'Hold' Rating After Positive Quarter Results

Brahmaputra Infrastructure, a microcap company in the capital goods industry, has recently received a 'Hold' rating from MarketsMOJO on October 15, 2024. This upgrade comes after the company declared very positive results for the quarter ending June 2024, with a growth in net profit of 94.69%. In fact, the company has shown positive results for the last 5 consecutive quarters.
The company's PBT LESS OI(Q) has grown at an impressive rate of 110.90%, while its PAT(Q) has grown at 91.0%. Additionally, its inventory turnover ratio (HY) is at a high of 1.26 times. These factors contribute to the stock being in a mildly bullish range, with technical trends showing improvement from sideways on October 15, 2024.

Furthermore, the stock has multiple bullish indicators such as RSI, Bollinger Band, and KST. With a ROCE of 11.2, the company has a very attractive valuation and is currently trading at a discount compared to its historical average. In the past year, the stock has generated a return of 61.36%, while its profits have risen by 77.7%. This is reflected in the company's low PEG ratio of 0.1.

However, the company does have some weak long-term fundamental strengths, with an average ROCE of 7.83%. Its net sales have only grown at an annual rate of 0.59% and operating profit at 4.33% over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 6.98 times, indicating a low ability to service debt.

Investors should also be aware that 100% of the promoter shares are pledged, which could put additional downward pressure on the stock prices in falling markets. Overall, while Brahmaputra Infrastructure has shown strong performance in the past year, its long-term fundamentals may be a cause for concern. Investors should carefully consider all factors before making any investment decisions.