Polylink Polymers (India) Shows Positive Results, But Weak Long-Term Fundamentals Raise Concerns

Polylink Polymers (India) has recently caught the attention of investors as its stock call has been upgraded to 'Hold' by MarketsMOJO on May 13, 2024. This microcap company in the plastic products industry has shown positive results in the last quarter, with its net sales reaching a record high of Rs 18.86 crore and PBDIT at Rs 0.82 crore. Its PBT less OI also saw a significant increase at Rs 0.53 crore.
Technically, the stock is in a mildly bullish range and its MACD and KST technical factors are also bullish. With a ROE of 5, the stock is currently trading at an attractive valuation with a price to book value of 2.3. In fact, it is currently trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 29.83%, while its profits have risen by 46%. This gives the company a PEG ratio of 0.9, indicating its potential for growth.

The majority shareholders of Polylink Polymers (India) are its promoters, which can be seen as a positive sign for the company. However, it is important to note that the company has weak long-term fundamental strength, with a -17.05% CAGR growth in operating profits over the last 5 years. Its ability to service its debt is also weak, with a poor EBIT to Interest (avg) ratio of 1.09. Additionally, the company has only been able to generate a low return on equity (avg) of 4.17%, indicating low profitability per unit of shareholders' funds.

Overall, while Polylink Polymers (India) has shown positive results in the last quarter and has potential for growth, it is important for investors to consider its weak long-term fundamentals and debt-servicing ability before making any investment decisions.