Mercury EV-Tech Receives 'Hold' Rating, Shows Strong Growth

Mercury EV-Tech, a smallcap company in the trading industry, has recently received a 'Hold' rating from MarketsMOJO on November 1, 2023. This upgrade is based on the company's healthy long-term growth, with net sales increasing at an annual rate of 81.87%. Additionally, the company has declared positive results for the last four consecutive quarters, with net sales growing by 55.1% and PAT (9M) at a higher rate of Rs 1.64 crore.
Technically, the stock is in a bullish range and has shown significant improvement since November 7, 2023, generating a return of 141.65%. Multiple factors, such as MACD, Bollinger Band, KST, DOW, and OBV, indicate a bullish trend for the stock.

In the past year, Mercury EV-Tech has outperformed the market (BSE 500) with a return of 1329.57%, compared to the market's 16.72% return. However, the company's management efficiency is a concern, with a low ROCE of 5.94%. This signifies a low profitability per unit of total capital (equity and debt). Additionally, the company's valuation is expensive, with a ROCE of 3.9 and an enterprise value to capital employed ratio of 33.1. This is higher than its average historical valuations.

It is also worth noting that despite its size, domestic mutual funds hold only 0% of the company. This could indicate that they are not comfortable with the current price or the business itself. As domestic mutual funds have the capability to conduct in-depth research, this could be a red flag for potential investors.

Overall, while Mercury EV-Tech has shown strong growth and market-beating performance, its management efficiency and expensive valuation should be considered before making any investment decisions.