Shree Ajit Pulp and Paper Upgraded to 'Hold' by MarketsMOJO, Showing Strong Management Efficiency and Debt Servicing Ability

Shree Ajit Pulp and Paper, a microcap company in the paper and paper products industry, has recently been upgraded to a 'Hold' by MarketsMOJO on January 8, 2024. This upgrade is based on the company's high management efficiency, with a ROCE (Return on Capital Employed) of 17.67%. Additionally, the company has a strong ability to service debt, with a low Debt to EBITDA ratio of 1.47 times.
Technically, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on January 8, 2024. The MACD and Bollinger Band technical factors also indicate a bullish trend for the stock.

With a ROCE of 4.6, the stock is fairly valued and has an Enterprise value to Capital Employed ratio of 0.9. It is currently trading at a discount compared to its average historical valuations. In the past year, the stock has generated a return of 8.44%, while its profits have increased by 65.9%. The PEG ratio of the company is 0.1, indicating a potential undervaluation.

The majority shareholders of Shree Ajit Pulp and Paper are the promoters of the company. However, the company has shown poor long-term growth, with a low annual growth rate of 2.01% in Net Sales and 4.21% in Operating Profit over the last 5 years.

In the latest quarter, the company reported negative results, with a fall of -78.1% in PAT (Profit After Tax) and the lowest ROCE (Return on Capital Employed) at 7.33%. The company's cash and cash equivalents also decreased to the lowest at Rs 1.18 crore.

In the last 1 year, Shree Ajit Pulp and Paper has underperformed the market, with a return of 8.44% compared to the market (BSE 500) returns of 26.22%. While the company has shown some positive aspects, such as high management efficiency and a strong ability to service debt, it is important to consider its poor long-term growth and recent negative results before making any investment decisions.