Rupa & Company Downgraded to 'Hold' by MarketsMOJO Due to Mixed Financial Performance

Rupa & Company, a smallcap company in the lifestyle industry, has recently been downgraded to a 'Hold' by MarketsMOJO on September 18, 2024. This decision was based on the company's current financial performance and market trends.
One of the main reasons for the downgrade is the company's strong ability to service debt, with a low Debt to EBITDA ratio of 1.13 times. This indicates that the company is in a good position to manage its debt obligations.

On a positive note, Rupa & Company has declared positive results for the last four consecutive quarters. Its PBT LESS OI(Q) has grown at an impressive rate of 256.34%, while its PAT(Q) has grown at 147.9%. The company also has a high cash reserve of Rs 220.97 crore, which is the highest in the last six months.

Technically, the stock is currently in a mildly bullish range, with its MACD and KST technical factors also showing a bullish trend. Additionally, with a ROE of 7.6 and a price to book value of 2.5, the stock is considered to be attractively valued. It is also trading at a discount compared to its average historical valuations.

However, the company's long-term growth has been poor, with net sales growing at an annual rate of 1.38% and operating profit at -13.52% over the last five years. This could be a cause for concern for investors.

In the last year, Rupa & Company has underperformed the market, generating a return of only 12.72% compared to the market's return of 34.92%. This could be due to the company's lower profits, which have only increased by 73.2% in the same period. The PEG ratio of the company is also at 0.4, indicating that its growth potential may not be as strong as expected.

In conclusion, while Rupa & Company may have some positive aspects, such as its strong ability to service debt and attractive valuation, its long-term growth and recent underperformance in the market may be a cause for concern. Investors are advised to hold on to their stocks for now and monitor the company's performance closely.