Ramkrishna Forgings downgraded to 'Hold' by MarketsMOJO due to current technical position

Ramkrishna Forgings, a midcap company in the castings/forgings industry, has recently been downgraded to a 'Hold' by MarketsMOJO on February 5th, 2024. This decision was based on the company's current performance and future potential.
Despite a healthy long-term growth rate of 27.23% in net sales and 42.91% in operating profit, the stock has been downgraded due to its current technical position. The company has consistently declared positive results for the last 13 quarters, with its net sales reaching a high of Rs 1,057.79 crore and its PAT at Rs 86.86 crore in the last quarter. Its PBDIT also reached a high of Rs 224.61 crore.

Technically, the stock is in a mildly bullish range with its MACD and KST technical factors also showing a bullish trend. However, the stock's high institutional holdings at 27.21% indicate that these investors have better capabilities and resources to analyze the company's fundamentals compared to retail investors.

Ramkrishna Forgings has also shown consistent returns over the last 3 years, outperforming BSE 500 in each of the last 3 annual periods. With a ROCE of 17.8, the stock has an expensive valuation with a 5 Enterprise value to Capital Employed. However, it is currently trading at a discount compared to its average historical valuations.

In the past year, the stock has generated a return of 187.96%, while its profits have risen by 19.9%. This has resulted in a PEG ratio of 6.9 for the company, indicating a slightly expensive valuation. Based on these factors, MarketsMOJO has downgraded the stock to a 'Hold' for now.