Rathi Bars Receives 'Hold' Rating and Shows Bullish Trend in Steel Industry

Rathi Bars, a microcap company in the steel/sponge iron/pig iron industry, has recently received a 'Hold' rating from MarketsMOJO on September 30, 2024. This upgrade is based on various technical indicators that show a bullish trend for the stock.
Since September 27, 2024, the stock has shown a 4.37% return and has been in a bullish range. Factors such as MACD, Bollinger Band, KST, and OBV have all contributed to this positive trend. Additionally, with a ROCE of 5.8, the stock is currently trading at an attractive valuation with a 0.9 Enterprise value to Capital Employed.

Despite the stock's strong performance in the past year with a return of 103.59%, its profits have only increased by 21%. This results in a PEG ratio of 1, indicating that the stock is trading at a discount compared to its average historical valuations. The majority shareholders of Rathi Bars are the promoters, which adds to the company's stability and potential for growth.

However, the company's long-term fundamental strength is weak with an average ROCE of 4.66%. Over the last 5 years, the net sales have only grown at an annual rate of 5.90% and the operating profit at 13.37%. Additionally, the company's ability to service its debt is poor with a low EBIT to Interest ratio of 1.92.

In the latest quarter, the company's results have been flat with a decline in net sales of -22.65%. This could be a cause for concern for investors, but the overall market performance of Rathi Bars has been impressive in the long term as well as the near term. It has outperformed BSE 500 in the last 3 years, 1 year, and 3 months, making it a promising stock to hold in one's portfolio.