Parag Milk Foods Receives 'Hold' Rating from MarketsMOJO, Shows Positive Growth and Attractive Valuation

Parag Milk Foods, a smallcap company in the FMCG industry, has recently received a 'Hold' rating from MarketsMOJO on October 14, 2024. This upgrade is based on the company's positive results in June 2024, with a growth of 135.77% in PBT LESS OI(Q) at Rs 21.29 crore and a highest ROCE(HY) of 10.29%. Additionally, the company's DEBT-EQUITY RATIO(HY) is at its lowest at 0.71 times.
Technically, the stock is in a Mildly Bullish range and has shown improvement since October 10, 2024, generating a return of 6.84%. Multiple factors such as MACD, Bollinger Band, KST, and OBV indicate a bullish trend for the stock.

At a ROCE of 8.8, Parag Milk Foods has an attractive valuation with a 2.2 Enterprise value to Capital Employed. The stock is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 8.98%, while its profits have increased by 49.8%. The PEG ratio of the company is 0.6, indicating a potential undervaluation.

However, the company's long-term fundamental strength is weak with a -2.62% CAGR growth in Operating Profits over the last 5 years. Its ability to service its debt is also poor with a low EBIT to Interest (avg) ratio of 0.31. The company's Return on Equity (avg) is at 5.81%, indicating low profitability per unit of shareholders' funds.

Despite being a smallcap company, domestic mutual funds hold only 0.06% of Parag Milk Foods. This could signify that they are not comfortable with the current price or the business, as domestic mutual funds have the capability to conduct in-depth research on companies.

In the last year, Parag Milk Foods has underperformed the market, generating a return of 8.98% compared to the market (BSE 500) returns of 35.61%. Investors should carefully consider these factors before making any investment decisions regarding Parag Milk Foods.