MarketsMOJO Upgrades Apollo Micro Systems with 'Buy' Rating, Company Shows Strong Growth

Apollo Micro Systems, a smallcap company in the electronics components industry, has recently received a 'Buy' rating from MarketsMOJO. This upgrade comes as the company has shown healthy long-term growth, with an annual operating profit growth rate of 34.51%. In fact, in the last quarter of March 2024, the company declared very positive results with a 79.33% growth in net profit. This trend has been consistent for the past three quarters.
One of the key factors contributing to this positive outlook is the company's operating profit to interest ratio, which is the highest at 3.46 times. Additionally, the company's net sales in the last quarter were also at a record high of Rs 135.44 crore. This, along with the fact that the stock is technically in a bullish range, makes it a promising investment option.

The technical trend for the stock has also improved from mildly bullish to bullish on 20th June 2024. Multiple indicators such as MACD, Bollinger Band, KST, and OBV are all showing a bullish trend for the stock. Moreover, Apollo Micro Systems has consistently outperformed the BSE 500 index in the last three annual periods, generating a return of 167.03% in the last year alone.

However, there are some risks associated with investing in this company. With a ROCE of 10.5, the stock is currently trading at a very expensive valuation with an enterprise value to capital employed ratio of 5.3. This is higher than its average historical valuations. Additionally, while the stock has generated a return of 167.03% in the last year, its profits have only risen by 58.4%, resulting in a high PEG ratio of 11.1.

Another risk to consider is that despite its size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the current price or the business itself. However, with its consistent growth and positive outlook, Apollo Micro Systems is definitely a stock to keep an eye on for potential investors.