MSP Steel & Power Receives 'Hold' Rating from MarketsMOJO, Reports Impressive Growth in Q1 2024

MSP Steel & Power, a smallcap company in the steel/sponge iron/pig iron industry, has recently received a 'Hold' rating from MarketsMOJO on October 18, 2024. This upgrade comes after the company reported positive results in the quarter ending June 2024. The company's PBT LESS OI(Q) has grown by an impressive 304.5%, while its PAT(Q) has seen a growth of 88.9%. Additionally, the company's operating profit to interest ratio is at its highest at 2.10 times.
From a technical standpoint, the stock is currently in a bullish range and has shown improvement since October 18, 2024. The MACD and KST technical factors are also bullish, indicating a positive trend for the stock.

In terms of market performance, MSP Steel & Power has outperformed the BSE 500 in the last 3 years, 1 year, and 3 months. It has also generated a return of 146.85% in the last year.

However, the company's long-term fundamental strength is weak, with a -49.25% CAGR growth in operating profits over the last 5 years. It also has a high debt to EBITDA ratio of 7.74 times, indicating a low ability to service debt. The company's return on equity (avg) is at a low 1.09%, indicating low profitability per unit of shareholders' funds.

Furthermore, the company's ROCE is at 5.3, making its valuation very expensive with a 2.3 enterprise value to capital employed. However, the stock is currently trading at a discount compared to its average historical valuations.

It is also worth noting that while the stock has generated a return of 146.85% in the past year, its profits have only risen by 160.4%, resulting in a PEG ratio of 0.7.

Another concern for investors is that 98.29% of the promoter shares are pledged. In a falling market, this can put additional downward pressure on the stock prices.

In conclusion, while MSP Steel & Power has shown positive results and a bullish trend in the short term, its long-term fundamental strength and high promoter pledged shares may be a cause for concern for investors. It is advisable to hold the stock for now and monitor its performance closely.