National Fertilizer Receives 'Hold' Rating After Strong Q3 Results, Technical Indicators Point to Bullish Trend

National Fertilizer, a midcap company in the fertilizer industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive results in September 2024, with the highest operating cash flow of Rs 668.06 crore and a 113.9% growth in profits.
Technically, the stock is in a mildly bullish range with multiple factors such as MACD, Bollinger Band, and KST indicating a bullish trend. Additionally, with a ROCE of 14.6 and an attractive valuation of 1.8 Enterprise value to Capital Employed, the stock is currently trading at a discount compared to its historical valuations.

In the past year, National Fertilizer has outperformed the market with a return of 65.22%, while its profits have increased by 230.4%. This has resulted in a low PEG ratio of 0.1, indicating a potential undervaluation of the stock.

However, the company's long-term fundamental strength is weak with a -0.49% CAGR growth in operating profits over the last 5 years. It also has a high debt to EBITDA ratio of 5.72 times, indicating a low ability to service debt. The company's return on capital employed is also low at 8.84%, indicating low profitability per unit of total capital.

It is worth noting that despite its size, domestic mutual funds hold only 0.22% of the company, which could signify their discomfort with the stock's price or the business itself. As a midcap company in the fertilizer industry, National Fertilizer may have potential for growth, but investors should carefully consider the company's fundamentals before making any investment decisions.