MarketsMOJO Upgrades Snowman Logistics to 'Hold' Rating Amidst Healthy Long-Term Growth

Snowman Logistics, a smallcap company in the logistics industry, has recently received a 'Hold' rating from MarketsMOJO on November 25, 2024. This upgrade comes as the company has shown healthy long-term growth, with an annual operating profit growth rate of 52.09%.

Technically, the stock is currently in a Mildly Bullish range, with the technical trend improving from Sideways on November 25, 2024. The Bollinger Band and OBV technical factors also indicate a Bullish trend for the stock.

Snowman Logistics also has an attractive valuation, with a ROCE of 5.1 and an Enterprise value to Capital Employed ratio of 2.1. This means that the stock is currently trading at a discount compared to its average historical valuations. However, over the past year, while the stock has generated a return of 19.42%, its profits have fallen by -41.9%.

In a positive sign, the promoters of Snowman Logistics have increased their stake in the company by 1.19% over the previous quarter and currently hold 46.43% of the company. This increase in stake shows high confidence in the future of the business.

However, the company's ability to service its debt is weak, with a poor EBIT to Interest (avg) ratio of 1.16. This means that the company may struggle to pay off its debt obligations. Additionally, the company has also shown low profitability per unit of shareholders' funds, with a Return on Equity (avg) of 1.16%.

In the latest quarter, Snowman Logistics has reported negative results, with a fall in PAT(Q) at Rs 0.61 crore, a decrease of -79.2%. The company's OPERATING PROFIT TO INTEREST (Q) is also at its lowest at 3.48 times, and PBDIT(Q) is at its lowest at Rs 22.04 crore.

Overall, while Snowman Logistics has shown potential for long-term growth, its current financial performance and weak ability to service its debt make it a 'Hold' for now. Investors should keep an eye on the company's future performance and any changes in its debt situation.