Machino Plastics Receives 'Hold' Rating After Strong Financial Results.

Machino Plastics, a microcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive financial results for the last four consecutive quarters.
The company's operating cash flow has been consistently high, with the latest figure at Rs 21.13 crore. Its PBDIT (profit before depreciation, interest, and taxes) and PAT (profit after tax) have also shown significant growth, with the latest figures at Rs 8.69 crore and Rs 2.12 crore respectively.

Technically, the stock is currently in a mildly bullish range, with an improved trend from mildly bearish on 28-Oct-24. This can be attributed to multiple bullish factors such as RSI, MACD, and KST.

Moreover, with a ROCE (return on capital employed) of 8.3, the stock is currently trading at a very attractive valuation with a 1.5 enterprise value to capital employed. It is also trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 28.99%, while its profits have increased by 224.8%. The PEG ratio of the company is also at a low 0.1.

The majority shareholders of Machino Plastics are its promoters, indicating their confidence in the company's growth potential.

However, the company does have some weak long-term fundamental strength, with a CAGR growth in operating profits of only 53.08% over the last 5 years. It also has a high debt to EBITDA ratio of 4.71 times, indicating a low ability to service debt. Additionally, the company's return on equity (average) is at a low 1.98%, indicating low profitability per unit of shareholders' funds.

In conclusion, while Machino Plastics has shown positive financial results and has received a 'Hold' rating, it is important to consider its weak long-term fundamentals before making any investment decisions.