Generic Engineering Construction & Projects Receives 'Hold' Rating from MarketsMOJO, Despite Positive Factors

Generic Engineering Construction & Projects, a microcap company in the engineering industry, has recently received a 'Hold' rating from MarketsMOJO on February 13, 2024. This upgrade is based on the company's high management efficiency, with a ROCE of 16.06%, and its strong ability to service debt, with a low Debt to EBITDA ratio of 0.96 times.
The stock is currently in a Mildly Bullish range, with technical factors such as MACD and Bollinger Band also showing a Bullish trend. Additionally, the company has a Very Attractive valuation with a ROCE of 7.6 and an Enterprise value to Capital Employed ratio of 1.1, trading at a discount compared to its historical valuations.

However, the company has shown poor long-term growth with a 6.90% annual growth rate in Net Sales and 10.20% in Operating profit over the last 5 years. In September 2023, the company declared Very Negative results with a fall in EPS of -18.68%. This trend has continued for the last 3 consecutive quarters, with the company's INTEREST(9M) growing at 115.82% and OPERATING CF(Y) at its lowest at Rs 13.08 Cr.

Moreover, there has been a decrease in institutional investors' stake by -2.85% over the previous quarter, with them collectively holding only 0.51% of the company. This indicates a lack of confidence in the company's fundamentals.

In terms of performance, the stock has underperformed BSE 500 in the last 3 years, 1 year, and 3 months, with a return of -9.61% in the last 1 year. Overall, while Generic Engineering Construction & Projects has some positive aspects, its poor long-term growth and declining institutional investor interest make it a 'Hold' for now.