MarketsMOJO Upgrades Lokesh Machines to 'Hold' After Positive Results and Bullish Trend

MarketsMOJO, a leading financial analysis firm, has recently upgraded its stock call on Lokesh Machines to 'Hold'. This decision comes after the company has shown positive results for the last three consecutive quarters, with a growth of 28.41% in net sales and a higher PAT of Rs 9.80 crore in the last half year.

Technically, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on June 14, 2024. Multiple factors such as MACD, Bollinger Band, KST, and DOW are also indicating a bullish trend for the stock.

With a ROCE of 7.6, the company has a fair valuation and a 3.4 enterprise value to capital employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 178.83%, while its profits have risen by 61.8%. The PEG ratio of the company stands at 1, indicating a balanced growth potential.

Lokesh Machines has also shown consistent returns over the last three years, outperforming BSE 500 in each of the annual periods. However, the company has weak long-term fundamental strength with a -0.96% CAGR growth in operating profits over the last five years. It also has a high debt to EBITDA ratio of 3.39 times, indicating a low ability to service debt. The company's return on equity (avg) stands at 3.42%, signifying low profitability per unit of shareholders' funds.

Despite being a microcap company, domestic mutual funds hold only 0% of the company. This could be due to their capability to conduct in-depth on-the-ground research on companies. Their small stake may signify that they are not comfortable with the current price or the business of Lokesh Machines.

In conclusion, while Lokesh Machines has shown positive results and a bullish trend in the short term, it has weak long-term fundamentals and low interest from domestic mutual funds. Investors are advised to hold their positions and monitor the company's performance closely.