Raghuvir Synthetics Receives 'Hold' Rating After Strong Performance in Textile Industry

Raghuvir Synthetics, a microcap company in the textile industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company's positive performance in the last 5 consecutive quarters, with a higher PAT (HY) of Rs 4.00 crore and the highest net sales (Q) of Rs 75.21 crore.
The stock is currently in a bullish range and its technical trend has improved from mildly bullish to bullish on 21-Aug-24. This can be attributed to multiple factors such as MACD, Bollinger Band, and KST.

However, the company's long-term fundamental strength is weak with a -245.62% CAGR growth in operating profits over the last 5 years. Additionally, its ability to service debt is poor with a low EBIT to Interest (avg) ratio of -0.88. The return on equity (avg) of 5.46% also indicates low profitability per unit of shareholders' funds.

Furthermore, the stock is currently trading at an expensive valuation with an enterprise value to capital employed ratio of 8.8. However, it is still at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 4.17%, while its profits have risen by 175.7%. The PEG ratio of the company is 0.5, indicating a potential undervaluation.

In the last 1 year, Raghuvir Synthetics has underperformed the market with a return of 4.17%, much lower than the market (BSE 500) returns of 38.03%. As a microcap company, it is important to keep an eye on its performance and future growth potential. Investors are advised to hold onto their stocks for now and monitor the company's progress closely.