MarketsMOJO Upgrades Sterling Tools . to 'Buy' Rating for Strong Financial Performance

Sterling Tools ., a smallcap company in the fasteners industry, has recently received a 'Buy' rating from MarketsMOJO. This upgrade is based on the company's strong ability to service debt, with a low Debt to EBITDA ratio of 0.82 times.
In addition, Sterling Tools . has shown impressive growth in net profit, with a 40.86% increase in Jun 24. The company has also declared positive results for the last 2 consecutive quarters, with a ROCE (HY) of 14.39% and cash and cash equivalents (HY) at Rs 104.99 crore, the highest in the industry. Its net sales have also grown at a rate of 27.69%, reaching Rs 281.68 crore.

From a technical standpoint, the stock is currently in a bullish range and has shown improvement since 06-Nov-24. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish trend for the stock.

With a ROE of 12.3, Sterling Tools . is fairly valued with a price to book value of 4.5. It is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 63.75%, while its profits have risen by 23%. The PEG ratio of the company is 1.5, indicating a positive outlook for future growth.

Moreover, Sterling Tools . has consistently delivered strong returns over the last 3 years, outperforming the BSE 500 index. However, there are some risks to consider, such as poor long-term growth as the operating profit has declined by an annual rate of -0.39% over the last 5 years. Additionally, there has been a decrease in participation by institutional investors, who hold 4.86% of the company's stake. This may be a cause for concern as institutional investors have better resources to analyze company fundamentals.

Overall, Sterling Tools . has shown promising growth and financial performance, making it a strong buy in the fasteners industry. However, investors should also consider the potential risks before making any investment decisions.