G M Breweries Receives 'Hold' Rating from MarketsMOJO, Indicating Mildly Bullish Trend

G M Breweries, a smallcap company in the breweries and distilleries industry, has recently received a 'Hold' rating from MarketsMOJO on October 17, 2024. This upgrade is based on several factors that indicate a mildly bullish trend for the stock.
One of the key reasons for the 'Hold' rating is the company's low Debt to Equity ratio, which is currently at 0 times. This indicates a strong financial position and lower risk for investors. Additionally, the stock is technically in a mildly bullish range, with indicators like MACD, Bollinger Band, KST, and DOW all showing positive signs.

In terms of performance, G M Breweries has outperformed the market (BSE 500) with a return of 49.68% in the last year, compared to the market's return of 33.11%. However, the company's long-term growth has been poor, with net sales growing at an annual rate of 5.10% and operating profit at 1.79% over the last 5 years.

The company's recent results for September 2024 also show some concerning numbers, with the lowest operating cash flow at Rs 59.27 crore and a significant decrease in profits at -44.6%. The debtors turnover ratio is also at its lowest at 832.02 times.

Despite these challenges, G M Breweries has a return on equity (ROE) of 18.2, which is considered high. However, this also means that the stock is currently trading at an expensive valuation with a price to book value of 2.3. The stock is also trading at a premium compared to its historical valuations.

It is worth noting that despite being a smallcap company, domestic mutual funds hold only 0% of G M Breweries. This could indicate that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, while G M Breweries has shown strong performance in the past year, its long-term growth and recent financial results raise some concerns. The 'Hold' rating from MarketsMOJO suggests a cautious approach for investors, considering the company's expensive valuation and lack of interest from domestic mutual funds.