MarketsMOJO Upgrades Ruby Mills to 'Hold' Based on Positive Results and Technical Trends

On July 26, 2024, MarketsMOJO upgraded their stock call on Ruby Mills to 'Hold'. This decision was based on the company's positive results in March 2024, with a 22.2% growth in net sales and the highest PBDIT and PBT LESS OI in the quarter.

Technically, the stock is currently in a bullish range and the technical trend has improved from mildly bullish on July 26, 2024. Multiple factors, such as RSI, MACD, Bollinger Band, KST, and OBV, indicate a bullish outlook for the stock.

However, there are some weak long-term fundamental strengths for Ruby Mills. The company has an average Return on Capital Employed (ROCE) of 4.33%, indicating poor long-term growth. Over the last 5 years, net sales have only grown at an annual rate of 4.22% and operating profit at 3.05%. Additionally, the company has a high Debt to EBITDA ratio of 7.20 times, indicating a low ability to service debt.

The stock also has an expensive valuation with an ROCE of 6.4 and an Enterprise value to Capital Employed ratio of 1.3. However, it is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 7.32%, while its profits have risen by 26.7%. The PEG ratio of the company is 0.7.

Despite being a microcap company, domestic mutual funds hold only 0% of Ruby Mills. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, the stock has underperformed the market, with a return of 7.32% compared to the market's (BSE 500) return of 36.61%. Investors should carefully consider these factors before making any investment decisions regarding Ruby Mills.