Heranba Industries Receives 'Hold' Rating After Positive Results, Technical Factors Show Bullish Trend

Heranba Industries, a smallcap company in the pesticides and agrochemicals industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in September 2024, with its operating cash flow reaching a high of Rs 135.86 crore and net sales at Rs 437.42 crore. Additionally, its PBDIT also saw a significant increase, reaching Rs 59.53 crore.
Technically, the stock is currently in a mildly bullish range, with both its KST and OBV technical factors showing a bullish trend. With a ROCE of 5.2, the stock is fairly valued and has an enterprise value to capital employed ratio of 2.1. Furthermore, the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, the stock has generated a return of 32.47%, while its profits have increased by 27.4%. This gives the company a PEG ratio of 1.2, indicating a reasonable valuation. However, the company's long-term fundamental strength is weak, with a -19.94% CAGR growth in operating profits over the last 5 years. Additionally, the company has a low return on equity of 4.14%, indicating low profitability per unit of shareholders' funds.

It is worth noting that despite its small size, domestic mutual funds hold only 0% of the company. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth on-the-ground research on companies. Overall, while Heranba Industries has shown positive results in the recent past, its long-term fundamentals and lack of interest from domestic mutual funds may be a cause for concern for potential investors.