MarketsMOJO Upgrades Asian Tea & Exports to 'Hold' Rating Amid Positive Financial Results

Asian Tea & Exports, a microcap company in the tea/coffee industry, has recently received a 'Hold' rating from MarketsMOJO on November 21, 2024. This upgrade comes as the company has shown positive results for the last three consecutive quarters.
In terms of financials, the company's operating cash flow has been the highest at Rs 5.28 crore, while its net sales have grown by 78.95% to reach Rs 25.25 crore in the last half year. Additionally, the company's profit after tax has also increased to Rs 1.05 crore.

Technically, the stock is currently in a mildly bullish range and has shown improvement from being mildly bearish on November 18, 2024. Multiple factors such as MACD, Bollinger Band, and KST are indicating a bullish trend for the stock.

Moreover, with a ROCE of 1, the company's valuation is attractive with an enterprise value to capital employed ratio of 0.6. The stock is also trading at a discount compared to its historical valuations. However, the company's profits have only risen by 2% in the past year, resulting in a PEG ratio of 5.9.

The majority shareholders of Asian Tea & Exports are the promoters, indicating their confidence in the company's future prospects. However, the company's long-term fundamental strength is weak with a negative CAGR growth of -160.33% in operating profits over the last five years. Additionally, the company has a high debt to EBITDA ratio of 10.28, indicating a low ability to service debt. The return on equity (avg) of 5.98% also signifies low profitability per unit of shareholders' funds.

In the last year, the stock has underperformed the market with a return of 11.15%, while the market (BSE 500) has generated a return of 23.25%. Overall, while the company has shown positive results in the recent quarters, its long-term fundamentals and underperformance in the market may be a cause for concern for potential investors.