Indian Hume Pipe Co. Upgraded to 'Hold' Rating

Indian Hume Pipe Company, a smallcap construction material company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This upgrade comes as the stock has shown a bullish trend and has generated a return of -5.17% since the upgrade on 06-Dec-23.
The technical indicators for the stock, such as MACD, Bollinger Band, KST, and OBV, are all showing bullish signals. Additionally, with a ROCE of 9.3 and an attractive valuation of 1.5 Enterprise value to Capital Employed, the stock is currently trading at a discount compared to its historical valuations.

However, the company's profits have fallen by -23.5% in the past year, despite the stock generating a return of 66.18%. This raises concerns about the long-term fundamental strength of the company, as it has shown a -3.35% CAGR growth in Operating Profits over the last 5 years. Furthermore, the company has a high Debt to EBITDA ratio of 3.60 times, indicating a low ability to service debt.

In the latest financial results for Sep 23, the company's operating cash flow was at its lowest at Rs 19.44 Cr, while its profits have also decreased by -30.40%. The dividend per share was also at its lowest at Rs 2.00.

It is worth noting that 30.69% of the promoter shares are pledged, which can put additional downward pressure on the stock prices in falling markets. Overall, while the stock has shown a strong performance in the past year, it is important to consider the company's weak long-term fundamentals before making any investment decisions.