Sakthi Sugars Receives 'Hold' Rating from MarketsMOJO, Technical Analysis Shows Bullish Trend

Sakthi Sugars, a microcap company in the sugar industry, has recently received a 'Hold' rating from MarketsMOJO on July 9, 2024. This upgrade is based on technical analysis, as the stock is currently in a bullish range and has generated a return of 2.54% since July 2, 2024. The key technical factor, MACD, has also been bullish since July 2, 2024. In terms of valuation, Sakthi Sugars has an attractive ROCE of 4.1 and a low enterprise value to capital employed ratio of 1.4. The stock is also trading at a discount compared to its historical valuations. However, its profits have fallen by -6.7% in the past year, despite generating a return of 60.27%. While the stock has outperformed the market (BSE 500) in the last year, it has a weak long-term fundamental strength due to its high debt-to-equity ratio of 6.5 times and a high debt to EBITDA ratio of 13.90 times. The company has also reported losses, resulting in a negative ROE. In the latest quarter, Sakthi Sugars reported flat results with non-operating income accounting for 857.69% of its profit before tax. Additionally, 70.77% of the promoter shares are pledged, which can put downward pressure on the stock prices in falling markets. The proportion of pledged holdings has also increased by 18.78% in the last quarter. Overall, while Sakthi Sugars has shown market-beating performance in the past year, its high debt and negative financial indicators suggest a cautious approach. Investors may want to hold onto their current positions and monitor the company's performance closely before making any further investment decisions.