KCP Sugar & Industries Corporation Receives 'Hold' Rating After Positive Financial Results

KCP Sugar & Industries Corporation, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO on January 23, 2024. This upgrade comes after the company's positive financial results in September 2023, with a 21.56% growth in net sales and a higher profit after tax of Rs 58.63 crore. The company's return on capital employed (ROCE) also reached its highest at 18.79%.
Technically, the stock is currently in a mildly bullish range, with both its MACD and KST technical factors showing a bullish trend. Additionally, with a return on equity (ROE) of 18.2, the company's valuation is attractive with a price to book value of 0.9. The stock is also trading at a discount compared to its historical valuations.

However, the company's long-term fundamental strength is weak, with a -142.65% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also poor, with a low EBIT to interest ratio of 0.38. The company's return on equity is also low at 5.35%, indicating low profitability per unit of shareholders' funds.

Majority shareholders of KCP Sugar & Industries Corporation are non-institutional investors. Despite the recent upgrade to a 'Hold' rating, investors should carefully consider the company's weak long-term fundamentals before making any investment decisions.