Pennar Industries Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results in September 2024

Pennar Industries, a smallcap company in the steel/sponge iron/pig iron industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade is based on the company's positive results in September 2024, with its operating profit to interest ratio reaching a high of 2.72 times and its profit after tax growing at 20.09%. Additionally, the company's PBT less OI ratio has also reached a high of Rs 30.13 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on 27-Nov-24. The MACD and Bollinger Band technical factors also indicate a bullish trend.

With a ROCE of 13.8, the company has a fair valuation and an enterprise value to capital employed ratio of 2.1. 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 64.77%, while its profits have risen by 20.5%. The PEG ratio of the company stands at 1.2.

Institutional investors have also shown increased interest in the company, with their stake rising by 1.11% in the previous quarter and collectively holding 6.29% of the company. This indicates that these investors, who have better resources and capabilities to analyze company fundamentals, see potential in Pennar Industries.

However, the company does have some weak long-term fundamental strengths. It has shown a -20.88% CAGR growth in operating profits over the last 5 years and has a high debt to EBITDA ratio of 3.18 times, indicating a low ability to service debt. The company's return on equity (average) stands at 7.00%, signifying low profitability per unit of shareholders' funds.

Overall, while Pennar Industries has shown consistent returns over the last 3 years and has recently received a 'Hold' rating, it also has some weak fundamental strengths that investors should consider before making any investment decisions.