Garnet Construction Receives 'Hold' Rating from MarketsMOJO After Strong Q2 Results

Garnet Construction, a microcap real estate company, has recently received a 'Hold' rating from MarketsMOJO on August 16, 2024. This upgrade comes after the company reported very positive results in June 2024, with a growth in net sales of 121.28%. The company's PBDIT(Q) was at its highest at Rs 9.99 crore, while PBT LESS OI(Q) and PAT(Q) were also at their highest at Rs 9.72 crore and Rs 7.25 crore respectively.
Technically, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on August 16, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, are also indicating a bullish trend for the stock.

In terms of valuation, Garnet Construction has a very attractive price to book value of 0.4 and is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 122.89%, while its profits have risen by 1056%.

The majority shareholders of Garnet Construction are its promoters, indicating their confidence in the company's performance. The stock has also outperformed the market (BSE 500) with a return of 122.89% in the last year, compared to the market's return of 36.18%.

However, the company's long-term fundamental strength is weak, with a -189.88% CAGR growth in operating profits over the last 5 years. Additionally, the company's return on equity (average) is at 4.78%, indicating low profitability per unit of shareholders' funds.

Overall, while Garnet Construction has shown strong performance in the past year, its long-term fundamentals may be a cause for concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.