MRO-TEK Realty Upgraded to 'Hold' Rating After Strong Quarter Results

MRO-TEK Realty, a microcap IT hardware company, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This upgrade comes after the company reported positive results in the quarter ending June 2024. The company's PBT (profit before tax) less OI (operating income) has grown by an impressive 211.8%, while its PAT (profit after tax) has increased by 80.1%. Additionally, the company's net sales have also seen a growth of 24.1%.
Technically, the stock is currently in a bullish range and has shown a 7.7% return since August 16, 2024. This improvement in technical trend is supported by factors such as MACD, Bollinger Band, and KST. The majority shareholders of MRO-TEK Realty are its promoters.

The stock has also outperformed the market (BSE 500) with a return of 60.53% in the last year, compared to the market's return of 37.46%. However, the company's long-term fundamental strength is weak, with poor growth in net sales and operating profit over the last 5 years. Additionally, the company has a high debt-to-equity ratio of 3.31 times.

With a ROCE (return on capital employed) of 2.8, the company's valuation is considered to be very expensive, with an enterprise value to capital employed ratio of 1.7. However, the stock is currently trading at a discount compared to its historical valuations. Despite the stock's impressive return in the past year, its profits have only risen by 274.9%, resulting in a low PEG (price/earnings to growth) ratio of 0.1.

Overall, while MRO-TEK Realty has shown positive results in the recent quarter and has a bullish technical trend, its long-term fundamental strength and high debt may be a cause for concern. Investors may want to hold onto the stock for now and monitor its performance closely.