Dhabriya Polywood: Impressive Performance and 'Buy' Rating

Dhabriya Polywood, a microcap company in the plastic products industry, has recently caught the attention of investors with its impressive performance in the market. MarketsMOJO has upgraded its stock call to 'Buy' on December 12, 2023, citing several positive factors.
One of the main reasons for the upgrade is the company's growth in operating profit, which has seen a significant increase of 75.45%. This has resulted in very positive results for the company in the last quarter. In fact, Dhabriya Polywood has declared positive results for the past 7 consecutive quarters, showcasing its consistent performance.

The company's operating profit to interest ratio is also at a high of 6.13 times, indicating its strong ability to service debt. Additionally, its PBDIT (Profit Before Depreciation, Interest, and Taxes) is at a high of Rs 7.60 crore, and its operating profit to net sales ratio is at 13.91%, further highlighting its strong financials.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement in its trend from mildly bullish to bullish on December 12, 2023. This is supported by multiple factors such as MACD, Bollinger Band, KST, and OBV.

Moreover, Dhabriya Polywood has consistently outperformed BSE 500 in the last 3 annual periods and has generated a remarkable return of 199.34% in the last year alone. This showcases its ability to deliver consistent returns to its investors.

However, like any investment, there are risks involved. The company has a high debt to EBITDA ratio of 2.92 times, which may affect its ability to service debt in the long term. Additionally, its net sales and operating profit have only grown at a rate of 9.19% and 0.34%, respectively, over the last 5 years, indicating a slow long-term growth potential.

Furthermore, with a ROCE (Return on Capital Employed) of 16.8, the stock is currently trading at a very expensive valuation with an enterprise value to capital employed ratio of 3.8. However, it is currently trading at a discount compared to its average historical valuations.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -6.47% in the previous quarter. This may signify a lack of confidence in the future of the business.

In conclusion, Dhabriya Polywood has shown impressive performance in the market and has been upgraded to a 'Buy' by MarketsMOJO. However, investors should be aware of the risks involved and make an informed decision based on their own research and risk appetite.