Kuwer Industries Receives 'Hold' Rating from MarketsMOJO After Strong Quarter Results

Kuwer Industries, a microcap company in the plastic products industry, has recently received a 'Hold' rating from MarketsMOJO on July 1, 2024. This upgrade is based on the company's positive financial results in the quarter ending March 2024.
The company's profits have seen a significant growth of 575.2% in the quarter, with PAT(Q) at Rs 2.11 crore. PBDIT(Q) has also reached its highest at Rs 4.26 crore, and the operating profit to net sales ratio has also seen a significant increase at 32.22%.

Technically, the stock is currently in a mildly bullish range and has shown improvement since June 26, 2024, with a return of -1.3%. The key technical factor, KST, has been bullish since June 26, 2024.

Kuwer Industries also has a very attractive valuation with a ROCE of 1.5 and an enterprise value to capital employed ratio of 0.9. The stock is currently trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 15.19%, while its profits have increased by 30%, resulting in a low PEG ratio of 0.1.

However, the company's majority shareholders are non-institutional investors, and it has weak long-term fundamental strength with an average ROCE of 2.95%. The company has also shown poor long-term growth, with net sales growing at an annual rate of 4.64% and operating profit at 14.41% over the last 5 years. Additionally, the company has a high debt to EBITDA ratio of 8.51 times, indicating a low ability to service debt.

In the last year, Kuwer Industries has underperformed the market, with a return of 15.19%, much lower than the market (BSE 500) returns of 37.64%. Overall, while the company has shown positive results in the recent quarter, it has some weaknesses in its long-term fundamentals and market performance. Therefore, MarketsMOJO has upgraded its rating to 'Hold' for Kuwer Industries.