Hindustan Adhesives downgraded to 'Hold' by MarketsMOJO, but shows strong growth potential

Hindustan Adhesives, a microcap company in the plastic products industry, has recently been downgraded to a 'Hold' by MarketsMOJO on July 8, 2024. This decision was based on various factors, including the company's healthy long-term growth and positive results in the last three consecutive quarters.
One of the key reasons for the 'Hold' rating is the company's impressive operating profit growth, which has seen an annual rate of 39.05%. Additionally, the company's PAT (HY) has also increased to Rs 8.31 crore, while its ROCE (HY) is at its highest at 19.89%. Furthermore, the company's debt-equity ratio (HY) is at its lowest at 0.80 times.

From a technical standpoint, the stock is currently in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Moreover, with a ROCE of 17, the stock is considered to have a very attractive valuation with a 1.9 enterprise value to capital employed.

In terms of its historical valuations, the stock is currently trading at a discount, making it an attractive option for investors. In the past year, the stock has generated a return of 115.13%, while its profits have risen by 237%. This has resulted in a PEG ratio of 0.1 for the company, indicating its potential for future growth.

It is worth noting that the majority shareholders of Hindustan Adhesives are the promoters, which can be seen as a positive sign for investors. Additionally, the stock has outperformed the market (BSE 500) with a return of 115.13% in the last year, compared to the market's return of 37.98%.

Overall, while the stock has been downgraded to a 'Hold', it still shows promising signs of growth and has the potential to generate good returns for investors in the long run.