S H Kelkar & Company: A Promising Investment Opportunity with Strong Financials and Positive Growth

S H Kelkar & Company, a smallcap company in the chemicals industry, has recently caught the attention of investors with its positive performance and attractive valuation. MarketsMOJO has upgraded its stock call to 'Buy' on 2024-08-14, citing several factors that make it a promising investment opportunity.
One of the key reasons for the 'Buy' recommendation is the company's low Debt to Equity ratio, which is currently at 0 times on average. This indicates a strong financial position and the ability to manage debt effectively.

Moreover, S H Kelkar & Company has delivered positive results for the last 3 consecutive quarters, with a significant growth in its Profit After Tax (PAT) at Rs 69.19 crore, which has increased by 131.32%. The company's Return on Capital Employed (ROCE) is also at its highest at 11.94%, further highlighting its strong performance.

From a technical standpoint, the stock is currently in a Mildly Bullish range and both its MACD and KST technical factors are also Bullish. This suggests a positive trend for the stock in the near future.

In terms of valuation, S H Kelkar & Company has a ROCE of 12.3 and an attractive Enterprise value to Capital Employed ratio of 1.7. Additionally, the stock is currently trading at a discount compared to its average historical valuations, making it an attractive buy for investors.

The company has also outperformed the market (BSE 500) with a return of 47.17% in the last year, while its profits have risen by 99.5%. This is reflected in its low PEG ratio of 0.2, indicating a strong potential for growth.

However, there are some risks associated with investing in S H Kelkar & Company. The company has shown poor long-term growth with a 13.01% annual growth rate in Net Sales and 15.77% in Operating Profit over the last 5 years. This could be a cause for concern for long-term investors.

Additionally, despite being a smallcap company, domestic mutual funds hold only 0% of the company's shares. This could indicate that they are not comfortable with the company's current price or its business, as they have the capability to conduct in-depth research on companies.

In conclusion, S H Kelkar & Company's recent performance and attractive valuation make it a promising investment opportunity. However, investors should also consider the risks associated with the company before making any investment decisions.