Precision Electronics Reports Record Sales Amid Mixed Long-Term Fundamentals and High Debt Concerns
Precision Electronics has recently adjusted its evaluation, reflecting a shift in the technical landscape. The company reported record quarterly net sales of Rs 18.06 crore and a peak PBDIT of Rs 4.59 crore, with a notable operating profit margin. However, long-term fundamentals show mixed results, including a high Debt to EBITDA ratio.
Precision Electronics, a microcap company in the industrial manufacturing sector, has recently undergone an adjustment in its evaluation. This revision reflects a shift in the technical landscape surrounding the stock, indicating a change in the technical trend from mildly bullish to bullish. The company has reported its highest quarterly net sales at Rs 18.06 crore, alongside a peak in PBDIT at Rs 4.59 crore, showcasing a notable operating profit margin of 25.42%. Despite these positive quarterly figures, the long-term fundamentals present a mixed picture. The average Return on Capital Employed (ROCE) stands at 2.76%, and the company has experienced modest growth in net sales and operating profit over the past five years, at annual rates of 4.81% and 0.42%, respectively.
Additionally, Precision Electronics faces challenges with a high Debt to EBITDA ratio of 8.94 times, indicating a low capacity to service its debt. The stock is currently trading at a discount compared to its peers' historical valuations, despite a return of -0.34% over the past year, coinciding with a significant decline in profits.
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