MRP Agro's Stock Upgraded to 'Hold' Based on Positive Performance and Technical Trend

MarketsMOJO has recently upgraded its stock call on MRP Agro to 'Hold' on November 26, 2024. This decision is based on the company's positive performance in the last two consecutive quarters. MRP Agro has reported a growth of 22.07% in net sales and a higher profit after tax of Rs 1.72 crore in the last six months.

From a technical standpoint, the stock is currently in a bullish range and the trend has improved from mildly bullish to bullish on November 26, 2024. This is supported by factors such as MACD, Bollinger Band, and DOW.

Moreover, there has been a rise in promoter confidence as they have increased their stake in the company by 0.83% in the previous quarter and currently hold 72.19% of the company. This is a positive sign as it shows high confidence in the future of the business.

In terms of returns, MRP Agro has consistently outperformed BSE 500 in the last three annual periods and has generated a return of 263.00% in the last year.

However, the company's long-term fundamental strength is weak with an average return on equity (ROE) of 6.41%. This is due to poor long-term growth in net sales and operating profit, which have grown at an annual rate of 18.20% and 4.00%, respectively, over the last five years. Additionally, the company's ability to service its debt is weak with a poor EBIT to interest ratio of 0.36.

Furthermore, MRP Agro has a very expensive valuation with a price to book value of 11.2 and an ROE of 7.7. Although the stock has generated a high return of 263.00% in the last year, its profits have only increased by 69%.

In conclusion, while MRP Agro has shown positive performance in the last two quarters and has a bullish technical trend, its long-term fundamental strength and expensive valuation should be considered before making any investment decisions.