MarketsMOJO Upgrades Rajshree Sugars & Chemicals to 'Hold' Rating Based on Technical Factors and Attractive Valuation

Rajshree Sugars & Chemicals, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO on June 12, 2024. This upgrade is based on various technical factors, such as the stock being in a bullish range and improvements in the technical trend.
The company also has an attractive valuation with a ROCE of 4.9 and a 1 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 81.80%, while its profits have increased by 253.6%. This results in a PEG ratio of 0.1 for the company.

Rajshree Sugars & Chemicals has also shown market-beating performance in the long term as well as the near term. Along with its impressive returns in the last year, the stock has outperformed BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company does have some weaknesses, such as high debt and weak long-term fundamental strength. Its net sales have only grown by an annual rate of 13.84% over the last 5 years, and it has a high debt to equity ratio of 4.79 times. The company has also reported losses, resulting in a negative ROE.

In the latest quarter, the company's results have been flat, with a decrease in net sales and a high interest expense. Additionally, 100% of the promoter shares are pledged, which can put downward pressure on the stock prices in falling markets.

Overall, while Rajshree Sugars & Chemicals has shown promising technical trends and attractive valuations, it is important to consider its high debt and weak long-term growth before making any investment decisions. Investors should also keep an eye on the pledged promoter shares and the company's quarterly results for any potential changes in the stock's performance.