Jubilant Industries Receives 'Hold' Rating from MarketsMOJO After Positive Q2 Results

Jubilant 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 June 2024, with its operating profit to interest ratio reaching a high of 10.31 times and its debt-equity ratio at a low of 0.69 times. Additionally, the company's net sales for the quarter were the highest at Rs 358.14 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on September 9, 2024. Multiple factors such as MACD, Bollinger Band, KST, and DOW are also indicating a bullish trend for the stock.

Jubilant Industries has consistently delivered strong returns over the last 3 years, outperforming the BSE 500 index in each of the last 3 annual periods. In the last 1 year alone, the stock has generated a return of 163.91%.

However, the company's high debt and weak long-term fundamental strength are areas of concern. With a debt to equity ratio (average) of 4.36 times, the company's profitability per unit of total capital (equity and debt) is low, with a return on capital employed (average) of 9.75%. Additionally, the stock is currently trading at an expensive valuation with an enterprise value to capital employed ratio of 7.9.

Despite its size, domestic mutual funds hold only 0% of Jubilant Industries, which could indicate that they are not comfortable with the stock's current price or the business itself. This is significant as domestic mutual funds have the capability to conduct in-depth research on companies.

In conclusion, while Jubilant Industries has shown strong performance in the past year, its high debt and weak long-term fundamentals may be a cause for concern. Investors may want to hold off on investing in this smallcap company until further improvements are seen.