Samhi Hotels Receives 'Hold' Rating from MarketsMOJO After Strong Q2 Results.

Samhi Hotels, a smallcap company in the hotel, resort, and restaurant industry, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company declared very positive results in June 2024, with a growth in operating profit of 23.16%. The company has also shown positive results for the last three consecutive quarters, with a growth in PAT(Q) at Rs 4.23 crore and NET SALES(HY) at Rs 529.05 crore.
The stock is currently in a bullish range and the technical trend has improved from mildly bullish on October 8, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish outlook for the stock. Additionally, the company has a high institutional holding of 81.25%, which suggests that these investors have better capabilities and resources to analyze the company's fundamentals.

However, Samhi Hotels also has some weak points in its long-term fundamental strength. The company has an average Return on Capital Employed (ROCE) of 5.07%, which is considered low. Its operating profit has only grown at an annual rate of 8.04% over the last five years, indicating poor long-term growth. The company also has a high Debt to EBITDA ratio of 7.41 times, which shows a low ability to service debt.

Moreover, with a ROCE of 5.1, the company has a very expensive valuation with a 2.1 Enterprise value to Capital Employed. While the stock has generated a return of 22.54% in the past year, its profits have only risen by 55%. This underperformance in the market is reflected in the stock's lower return compared to the market (BSE 500) returns of 35.27% in the last year.

In conclusion, while Samhi Hotels has shown positive results in the recent quarter and has a bullish outlook, it also has some weak points in its long-term fundamentals and valuation. Investors may want to hold onto the stock for now and keep an eye on its future performance.