Narmada Agrobase receives 'Hold' rating from MarketsMOJO, shows positive financial growth

Narmada Agrobase, a microcap company in the agriculture industry, has recently received a 'Hold' rating from MarketsMOJO on September 12, 2024. This upgrade is based on the company's positive financial results in the last quarter, with a growth in net profit of 827.27%. The company has also shown consistent positive results in the last two quarters, with its operating cash flow at a high of Rs 1.23 crore and a 54.21% growth in net sales.
Technically, the stock is in a mildly bullish range and has shown improvement from a sideways trend on September 12, 2024. Multiple factors such as MACD, Bollinger Band, KST, and OBV indicate a bullish trend for the stock.

In terms of valuation, Narmada Agrobase has a very attractive ROCE of 6.6 and a 1.6 enterprise value to capital employed. The stock is currently trading at a discount compared to its historical valuations. Despite generating a return of 24.91% in the past year, the company's profits have risen by 37%, resulting in a low PEG ratio of 0.3.

However, the company's long-term fundamental strength is weak, with an average ROCE of 7.24% and a low growth rate in net sales and operating profit over the last five years. Additionally, the company has a high debt to EBITDA ratio of 4.19 times, indicating a low ability to service debt.

Moreover, there has been a decrease in promoter confidence as they have reduced their stake in the company by -5.91% in the previous quarter. Currently, promoters hold 57.66% of the company, which may signify a lack of confidence in the future of the business.

In the last year, Narmada Agrobase has underperformed the market, generating a return of 24.91% compared to the market's (BSE 500) return of 36.29%. Based on these factors, MarketsMOJO has upgraded the stock to a 'Hold' rating, suggesting a neutral stance for investors.