Rajasthan Tube Manufacturing Co Upgraded to 'Hold' by MarketsMOJO, Attractive Valuation and Technical Factors Cited

Rajasthan Tube Manufacturing Co, a microcap company in the steel/sponge iron/pig iron industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This upgrade is based on various technical factors, such as the stock being in a bullish range and improvements in its technical trend.
One of the key reasons for the 'Hold' rating is the company's attractive valuation, with a ROCE of 12.5 and a 1.6 Enterprise value to Capital Employed. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

However, there are some concerns about the company's long-term fundamental strength. It has a high level of debt and has shown poor long-term growth, with net sales only growing at an annual rate of 3.89% over the last 5 years. The company's ability to service its debt is also weak, with a poor EBIT to Interest ratio.

Furthermore, the company has underperformed the market in the last year, with a return of only 18.78% compared to the market's return of 35.61%. This is also reflected in the company's flat results in June 2024.

It is worth noting that the majority shareholders of Rajasthan Tube Manufacturing Co are promoters, which may indicate their confidence in the company's future prospects. However, it is important to consider the company's weak long-term growth and profitability before making any investment decisions.

Overall, while the recent upgrade to a 'Hold' by MarketsMOJO may be a positive sign, investors should carefully evaluate all factors before making any decisions regarding Rajasthan Tube Manufacturing Co's stock.