Mahaveer Infoway Receives 'Hold' Rating from MarketsMOJO Based on Positive Financial Results

Mahaveer Infoway, a microcap IT software company, has recently received a 'Hold' rating from MarketsMOJO on May 21, 2024. This upgrade is based on the company's positive financial results for the last three consecutive quarters. Its ROCE (HY) is at a high of 12.70%, while its inventory turnover ratio (HY) and debtors turnover ratio (HY) are also at their highest levels of 8.49 times and 7.49 times, respectively.
Technically, the stock is in a mildly bullish range and has shown improvement since May 16, 2024, with a return of -2.59%. Factors such as MACD, Bollinger Band, and OBV are also bullish for the stock.

At a ROCE of 11.5, the company has a very attractive valuation with a 1.1 enterprise value to capital employed. It is currently trading at a discount compared to its historical valuations. However, despite generating a return of 11.21% in the past year, its profits have fallen by -46%.

The majority shareholders of Mahaveer Infoway are non-institutional investors. The company's long-term fundamental strength is weak, with a -28.56% CAGR growth in net sales over the last five years. Its ability to service its debt is also poor, with a low EBIT to interest (avg) ratio of 0.04. Additionally, the company has a low return on equity (avg) of 1.09%, indicating low profitability per unit of shareholders' funds.

In the last year, the stock has underperformed the market, generating a return of 11.21% compared to the market's (BSE 500) return of 36.54%. While the company's recent financial results have been positive, its weak long-term fundamentals and underperformance in the market may be a cause for concern for potential investors.