Macrotech Developers Upgraded to 'Hold' Rating by MarketsMOJO for Strong Growth Potential

Macrotech Developers, a largecap company in the construction and real estate industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This decision is based on the company's healthy long-term growth, with an annual operating profit growth rate of 50.04%. Additionally, Macrotech Developers has declared positive results for the last four consecutive quarters, with a significant increase in both PAT (136.18%) and net sales (62.52%).
Technically, the stock is currently in a mildly bullish range, with the technical trend improving from sideways on November 28, 2024. Multiple factors, such as Bollinger Band, KST, and OBV, indicate a bullish outlook for the stock. Furthermore, the company has a high institutional holding of 26.98%, indicating that these investors have better capabilities and resources to analyze the company's fundamentals.

Macrotech Developers has also shown market-beating performance in both the long-term and near-term, with a return of 46.85% in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months. With a market cap of Rs 1,28,062 crore, it is the second-largest company in the sector, constituting 13.84% of the entire industry's market share. Its annual sales of Rs 12,421.30 crore make up 11.87% of the industry.

However, the company does have a low ability to service debt, with a high debt to EBITDA ratio of 4.75 times. This could potentially impact its financial stability in the future. Additionally, Macrotech Developers has a low return on capital employed (avg) of 9.74%, indicating low profitability per unit of total capital. Its ROCE of 13.3 also suggests a very expensive valuation, with a 5.6 enterprise value to capital employed.

Despite these concerns, the stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 46.85%, its profits have only risen by 40.5%, resulting in a PEG ratio of 1.7. Overall, MarketsMOJO's 'Hold' rating for Macrotech Developers is based on its current performance and potential for future growth in the construction and real estate industry.