MarketsMOJO upgrades Ajmera Realty & Infra India to 'Hold' after strong Q2 results

Ajmera Realty & Infra India, a smallcap company in the construction and real estate industry, has recently received a 'Hold' rating from MarketsMOJO on October 28, 2024. This upgrade comes after the company declared very positive results for the quarter ending September 24, with a growth in operating profit of 61.55%. This marks the fourth consecutive quarter of positive results for the company.
The company's operating cash flow has also seen a significant increase, with the highest at Rs 219.74 crore. Additionally, the net sales for the quarter have grown at 37.58%, reaching Rs 199.96 crore. The PBT less OI for the quarter is also at its highest at Rs 42.37 crore.

Technically, the stock is in a bullish range and has shown improvement since October 22, 2024, generating a return of 4.59%. Multiple factors such as MACD, Bollinger Band, KST, DOW, and OBV indicate a bullish trend for the stock.

In the long term, the stock has outperformed BSE 500 and has generated a return of 128.46% in the last year. However, the company's fundamental strength is weak, with a CAGR growth of only 8.75% in operating profits over the last 5 years. The high debt to EBITDA ratio of 6.75 times also raises concerns about the company's ability to service debt. The return on equity (avg) is at a low 7.46%, indicating low profitability per unit of shareholders' funds.

The stock is currently trading at a discount compared to its average historical valuations and has a PEG ratio of 0.7. Despite the company's smallcap size, domestic mutual funds hold only 0% of the company, which could signify their discomfort with the stock's price or business. Overall, while the stock has shown strong market-beating performance in the near term, its long-term fundamentals raise some concerns. Investors may want to hold off on investing in Ajmera Realty & Infra India until further improvements are seen.