HPL Electric & Power Receives 'Hold' Rating, Shows Positive Results and Bullish Trend

HPL Electric & Power, a smallcap company in the electric equipment industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in September 2023, with its ROCE (HY) reaching a high of 9.50%. The PBT LESS OI(Q) has also shown significant growth at 77.75%, while the PAT(Q) has grown at 75.4%.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 15th December 2023. Multiple factors such as MACD, Bollinger Band, KST, and OBV are also indicating a bullish trend for the stock.

At a ROCE of 9.7, the stock is fairly valued with a 1.5 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. However, despite generating a return of 110.37% in the past year, the company's profits have only risen by 0.7%, resulting in a high PEG ratio of 40.4.

HPL Electric & Power has consistently delivered strong returns over the last 3 years, outperforming the BSE 500 index. However, its long-term fundamental strength is weak with an average ROCE of 7.33%. The company has also shown poor growth in net sales and operating profit over the last 5 years.

One concerning factor for the company is its high debt to EBITDA ratio of 3.79 times, indicating a low ability to service debt. Additionally, despite being a smallcap company, domestic mutual funds hold only 0% of the company, which could suggest that they are not comfortable with the company's current price or business.

In conclusion, while HPL Electric & Power has shown positive results and a bullish trend in the short term, its long-term fundamental strength and high debt levels may be a cause for concern. Investors should carefully consider these factors before making any investment decisions.