MarketsMOJO Upgrades Hampton Sky Realty to 'Hold' Rating Based on Strong Debt Servicing and Positive Results

Hampton Sky Realty, a microcap company in the construction and real estate industry, has recently received a 'Hold' rating from MarketsMOJO on October 25, 2024. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.48 times. Additionally, the company has shown positive results for the last four consecutive quarters, with a growth in operating profit of 20.91% in June 2024.
The company's net sales have also seen a significant increase of 148.40% at Rs 120.50 crore in the last half year, while PBT LESS OI(Q) has grown at 263.5% and PAT(Q) at 257.7%. With a ROCE of 17.4, the company is considered to have a fair valuation with a 4 Enterprise value to Capital Employed. However, the stock is currently trading at a discount compared to its average historical valuations.

Institutional investors have also shown an increasing interest in the company, with a 0.84% increase in their stake in the previous quarter. They collectively hold 4.43% of the company, indicating their confidence in the company's fundamentals.

On the other hand, the company's management efficiency is a cause for concern, with a low ROCE of 8.70%. This signifies a low profitability per unit of total capital (equity and debt). In the long term, the company has also shown poor growth, with net sales growing at an annual rate of 13.60% and operating profit at 6.45% over the last five years.

From a technical standpoint, the stock is currently in a mildly bearish range, with both MACD and Bollinger Band technical factors showing a bearish trend. In terms of performance, the stock has underperformed the BSE 500 in the last three years, one year, and three months, with a return of -35.48% in the last year.

Overall, while Hampton Sky Realty has shown positive results in the short term, its long term growth and management efficiency are areas of concern. Investors are advised to hold onto their positions for now and monitor the company's performance closely.