Manaksia Coated Metals & Industries: A Microcap Company with Impressive Growth and Attractive Valuation

Manaksia Coated Metals & Industries, a microcap engineering company, has recently caught the attention of investors with its positive performance in the last three quarters. MarketsMOJO has upgraded its stock call to 'Buy' on October 3, 2024.
The company has shown impressive growth in its profits, with PAT(HY) at Rs 8.04 crore, growing at 106.10%, and PBT LESS OI(Q) at Rs 2.43 crore, growing at 80.7%. Its ROCE(HY) is also at its highest at 14.45%, indicating strong financial performance.

Technically, the stock is in a bullish range and has shown a 2.99% return since September 27, 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV are also bullish for the stock.

Attractive valuation is another reason to consider investing in Manaksia Coated Metals & Industries. With a ROCE of 12.4 and an enterprise value to capital employed ratio of 2.2, the stock is trading at a discount compared to its historical valuations. In the past year, the stock has generated a return of 187.26%, while its profits have risen by 190.7%. The PEG ratio of the company is also at a low 0.2.

Moreover, the company has consistently delivered strong returns over the last three years, outperforming BSE 500 in each of the last three annual periods.

However, there are some risks to consider before investing in the company. Manaksia Coated Metals & Industries has a high debt to EBITDA ratio of 4.16 times, which may affect its ability to service debt. Additionally, the company has a low return on equity (avg) of 5.74%, indicating low profitability per unit of shareholders' funds.

Another risk factor is the low stake of domestic mutual funds in the company, despite its small size. This may suggest that they are not comfortable with the stock's price or the business itself.

In conclusion, Manaksia Coated Metals & Industries has shown strong financial performance and has caught the attention of investors. However, it is important to consider the risks before making any investment decisions.