Generic Engineering Construction & Projects Receives 'Hold' Rating After Positive Quarter Results

Generic Engineering Construction & Projects, a microcap company in the engineering industry, has recently received a 'Hold' rating from MarketsMOJO on July 8, 2024. This upgrade comes after the company reported positive results in the quarter ending March 2024, with the highest operating profit to interest ratio of 5.75 times and net sales of Rs 140.40 crore. The company's profits have also shown a growth of 26.6% in this quarter.
Technically, the stock is currently in a mildly bullish range, with an improved trend from sideways on July 8, 2024. The MACD and Bollinger Band technical factors also indicate a bullish trend. Additionally, with a ROCE of 5.5, the stock is considered to have a very attractive valuation with a 1.2 enterprise value to capital employed. It is currently trading at a discount compared to its average historical valuations.

However, the company has underperformed in the long term, with a -7.32% CAGR growth in operating profits over the last 5 years. The return on equity (avg) is also low at 5.53%, indicating low profitability per unit of shareholders' funds. The stock has also generated a lower return of 16.25% in the last year compared to the market (BSE 500) returns of 37.98%.

The majority shareholders of Generic Engineering Construction & Projects are non-institutional investors. Overall, while the company has shown positive results in the recent quarter, its long term fundamental strength and performance have been weak. Investors are advised to hold the stock for now and monitor its performance closely.