MarketsMOJO Upgrades Foods & Inns to 'Hold' Based on Strong Long-Term Growth and Technical Factors

Foods & Inns, a microcap company in the FMCG industry, has recently been upgraded to a 'Hold' by MarketsMOJO on April 16, 2024. This upgrade is based on the company's healthy long-term growth, with net sales growing at an annual rate of 29.08% and operating profit at 42.62%.
Technically, the stock is in a mildly bullish range, with the trend improving from sideways on April 16, 2024. The Bollinger Band and OBV technical factors are also bullish. Additionally, with a ROCE of 13.3, the company has an attractive valuation with a 1.7 enterprise value to capital employed. The stock is currently trading at a discount compared to its average historical valuations.

However, one concern for the company is its high debt to EBITDA ratio of 4.30 times, indicating a low ability to service debt. The company has also shown low profitability per unit of total capital, with a return on capital employed of 7.57%.

In December 2023, the company declared negative results after six consecutive positive quarters. The PBT LESS OI(Q) at Rs 3.54 crore has fallen by 78.6%, while the PAT(Q) at Rs 3.75 crore has fallen by 70.2%. The interest for the last nine months has also grown by 35.02%.

In the last year, the stock has underperformed the market, generating a return of 23.88% compared to the market's (BSE 500) return of 35.65%. While the company has shown potential for growth, it is important to consider its current financial situation and performance before making any investment decisions.