MarketsMOJO Upgrades Menon Bearings to 'Hold' Rating Based on Strong Debt Management

Menon Bearings, a microcap company in the auto ancillary industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's strong ability to service its debt, with a low Debt to EBITDA ratio of 0.54 times.
Technically, the stock is in a Mildly Bullish range and has shown improvement from a Sideways trend on 21-Aug-24. The Bollinger Band and KST technical factors also indicate a Bullish trend.

However, the company has shown poor long-term growth, with Net Sales growing at an annual rate of 2.83% and Operating profit at 5.47% over the last 5 years. In the latest quarter, the company's profits have fallen by -25.7%, with a PAT (HY) of Rs 11.78 crore, which is a decrease of -27.73%.

With a ROE of 15.8, the stock is currently trading at an expensive valuation, with a Price to Book Value of 4.9. This is a premium compared to its average historical valuations. In the past year, while the stock has generated a return of -3.62%, its profits have also declined by -25.7%.

It is worth noting that despite being a microcap company, domestic mutual funds hold only 0% of Menon Bearings. This could indicate that they are either not comfortable with the current price or have not conducted in-depth research on the company.

In the last 1 year, Menon Bearings has underperformed the market (BSE 500), which has generated returns of 38.03%. The stock, on the other hand, has generated negative returns of -3.62%. While the company may have potential, it is important for investors to carefully consider all factors before making any investment decisions.