Lokesh Machines receives 'Hold' rating from MarketsMOJO, shows positive results and bullish trend

Lokesh Machines, a microcap engineering company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company has shown positive results for the last three consecutive quarters, with a 28.41% growth in net sales and a higher PAT of Rs 9.80 crore in the last half year.
Technically, the stock is in a bullish range and has shown improvement from a mildly bullish trend on 25-Jul-24. Multiple factors such as MACD, Bollinger Band, KST, and OBV indicate a bullish trend for the stock.

With a ROCE of 7.6, the company has a fair valuation and a 3.4 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 124.09%, while its profits have risen by 61.8%. The PEG ratio of the company is 1, indicating a balanced growth potential.

Lokesh Machines has also shown consistent returns over the last three years, outperforming BSE 500 in each of the last three annual periods.

However, the company has weak long-term fundamental strength with a -0.96% CAGR growth in operating profits over the last five years. It also has a high Debt to EBITDA ratio of 3.39 times, indicating a low ability to service debt. The company's Return on Equity (avg) is 3.42%, signifying low profitability per unit of shareholders' funds.

It is worth noting that despite being a microcap company, domestic mutual funds hold only 0% of the company. This could suggest that either they are not comfortable with the current price or they have not conducted in-depth research on the company.

Overall, while Lokesh Machines has shown positive results and a bullish trend, it also has some weaknesses in its long-term fundamentals. Investors may want to hold onto their stocks for now and keep an eye on the company's future performance.