Incredible Industries Receives 'Hold' Rating from MarketsMOJO, Attractive Valuation and Technical Factors Cited

Incredible Industries, a microcap company in the steel/sponge iron/pig iron industry, has recently received a 'Hold' rating from MarketsMOJO on September 19, 2024. This upgrade is based on various technical factors, including a bullish trend and positive indicators such as MACD, Bollinger Band, and KST.
One of the main reasons for the 'Hold' rating is the stock's attractive valuation, with a ROCE of 8.3 and a 1.6 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its historical valuations, making it a potentially good investment opportunity.

In the past year, Incredible Industries has outperformed the market (BSE 500) with a return of 62.60%. However, its profits have only increased by 5.2%, resulting in a PEG ratio of 6.9. This indicates that the company's growth may not be sustainable in the long term.

Furthermore, the company's fundamental strength is weak, with a -10.78% CAGR growth in Operating Profits over the last 5 years. Its ability to service its debt is also a concern, with a poor EBIT to Interest (avg) ratio of 1.83. Additionally, the company's Return on Equity (avg) is only 2.82%, indicating low profitability per unit of shareholders' funds.

In the latest quarter, Incredible Industries reported flat results, with a 10.6% decrease in net sales. Moreover, 68.03% of the company's promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets.

Overall, while Incredible Industries may have shown strong performance in the past year, its long-term growth potential and fundamental strength are questionable. Investors should carefully consider these factors before making any investment decisions.