Rungta Irrigation's Stock Gets 'Buy' Rating from MarketsMOJO, Shows Impressive Growth and Attractive Valuation

Rungta Irrigation, a microcap company in the plastic products industry, has recently caught the attention of investors as MarketsMOJO has upgraded its stock call to 'Buy' on January 23, 2024.
One of the main reasons for this upgrade is the company's healthy long-term growth. Rungta Irrigation has shown an impressive annual growth rate of 53.35% in its operating profit. In addition, the company has declared positive results for the last 9 consecutive quarters, with its net sales growing at 32.50% and its PAT (profit after tax) increasing to Rs 3.01 crore in the last half year.

Technically, the stock is also in a mildly bullish range, with multiple factors such as MACD, Bollinger Band, KST, and OBV pointing towards a bullish trend. Moreover, with a ROCE (return on capital employed) of 7, the company has a very attractive valuation with a 1.4 enterprise value to capital employed. This means that the stock is currently trading at a discount compared to its average historical valuations.

Over the past year, Rungta Irrigation's stock has generated a return of 85.18%, while its profits have risen by a whopping 467%. This translates to a PEG (price/earnings to growth) ratio of 0.1, indicating that the stock is undervalued and has potential for further growth.

Majority of the company's shareholders are non-institutional, which could be seen as a positive sign as it shows confidence in the company's performance. Additionally, Rungta Irrigation has consistently outperformed the BSE 500 index in the last 3 annual periods, further solidifying its position as a promising investment.

However, there are some risks associated with investing in Rungta Irrigation. The company has a low ROCE of 1.68%, indicating poor management efficiency and low profitability per unit of total capital. Moreover, its high debt to EBITDA ratio of 6.83 times raises concerns about its ability to service debt. The company's return on equity (ROE) is also low at 2.55%, indicating low profitability per unit of shareholders' funds.

In conclusion, Rungta Irrigation's recent upgrade to a 'Buy' stock call by MarketsMOJO is a positive sign for investors. With its impressive growth and attractive valuation, the company has the potential to generate good returns. However, it is important to consider the risks associated with the company before making any investment decisions.