Mangalam Organics Downgraded to 'Hold' by MarketsMOJO: Here's What You Need to Know

Mangalam Organics, a microcap company in the chemicals industry, has recently been downgraded to a 'Hold' by MarketsMOJO on August 29, 2024. This decision was based on various factors, including the company's ability to service its debt, positive financial results, technical trends, and valuation.
One of the main reasons for the 'Hold' rating is the company's strong ability to service its debt, with a low Debt to EBITDA ratio of 1.16 times. This indicates that the company is in a good position to manage its debt obligations.

In addition, Mangalam Organics has declared positive results for the last four consecutive quarters, with a higher PAT (HY) of Rs 4.12 crore and the highest PBDIT (Q) of Rs 10.87 crore. The company's PBT LESS OI (Q) is also at its highest at Rs 1.88 crore.

From a technical standpoint, the stock is currently in a bullish range and has shown significant improvement since July 2, 2024, generating a return of 45.04%. Multiple factors, such as MACD, Bollinger Band, KST, and OBV, also indicate a bullish trend for the stock.

Furthermore, with a ROCE of 4.2, the stock is fairly valued with a 1.4 Enterprise value to Capital Employed. It is also trading at a discount compared to its average historical valuations. Despite a return of 36.79% in the past year, the company's profits have risen by 128.2%, resulting in a low PEG ratio of 0.6.

It is worth noting that the majority shareholders of Mangalam Organics are the promoters, which can be seen as a positive sign for the company's stability and growth potential.

However, one area of concern is the company's poor long-term growth, with an annual operating profit growth rate of -142.15% over the last five years. This is something investors should keep in mind while considering the stock.

Overall, while Mangalam Organics may not be a strong buy at the moment, it is still a company worth keeping an eye on for potential future growth.