Saboo Sodium Chloro receives 'Hold' rating from MarketsMOJO after positive results and bullish trend

Saboo Sodium Chloro, a microcap company in the FMCG industry, has recently received a 'Hold' rating from MarketsMOJO on October 31, 2024. This upgrade comes after the company reported positive results in June 2024, with a significant growth in PBT LESS OI(Q) at Rs 1.99 crore, which has increased by 11471.4%. The company's NET SALES(9M) at Rs 45.49 crore has also shown a growth of 23.82%, while its PAT(9M) has increased to Rs 2.30 crore.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on October 31, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock.

However, there are some concerns regarding the company's long-term fundamental strength. With a CAGR growth of only 13.42% in operating profits over the last 5 years, the company's ability to service debt is also low, with a high Debt to EBITDA ratio of 6.59 times. Additionally, the company's Return on Equity (avg) of 0.71% reflects low profitability per unit of shareholders' funds.

The stock is currently trading at a very expensive valuation, with a price to book value of 2.4. However, it is still at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 42.24%, while its profits have risen by 333.7%. This gives the company a PEG ratio of 0.1, indicating a potential undervaluation.

It is worth noting that the majority of the company's shareholders are non-institutional investors. Overall, while Saboo Sodium Chloro has shown positive growth in its recent results, there are some concerns regarding its long-term fundamental strength and valuation. Investors may want to hold onto the stock for now and monitor its performance closely.