Gagan Gases Receives 'Hold' Rating After Positive Q3 Results, Promoters Increase Stake

Gagan Gases, a microcap company in the industrial gases and fuels industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending September 2024, with its PBDIT, PBT less OI, and PAT reaching their highest levels at Rs 0.10 cr, Rs 0.08 cr, and Rs 0.08 cr respectively.
The stock is currently in a bullish range, with its technical trend improving from mildly bullish on 07-Nov-24. This is supported by multiple factors such as MACD, Bollinger Band, and KST. Additionally, the promoters of Gagan Gases have shown confidence in the company's future by increasing their stake by 0.65% in the previous quarter, currently holding 38.43% of the company.

In terms of performance, Gagan Gases has outperformed the BSE 500 index in the last 3 years, 1 year, and 3 months, with a return of 48.25% in the last year alone. However, the company's long-term fundamental strength is weak, with a 2.47% CAGR growth in operating profits over the last 5 years. Its ability to service debt is also a concern, with a poor EBIT to Interest (avg) ratio of 0.16.

The stock is currently trading at an expensive valuation, with a price to book value of 3.7 and a ROE of 5.1. However, it is still at a discount compared to its average historical valuations. It is worth noting that while the stock has generated a return of 48.25% in the past year, its profits have declined by -90.9%.

Overall, Gagan Gases shows potential for growth in the near term, but its long-term fundamental strength and valuation should be carefully considered before making any investment decisions.