Shri Keshav Cements & Infra Upgraded to 'Hold' Rating After Strong Q1 Results

Shri Keshav Cements & Infra, a microcap company in the cement industry, has recently been upgraded to a 'Hold' rating by MarketsMOJO. This upgrade comes after the company declared very positive results for the quarter ending in March 2024, with a growth in operating profit of 33.87%. This is the second consecutive quarter in which the company has reported positive results.
One of the key factors contributing to this upgrade is the company's low debt-to-equity ratio of 1.88 times, which is the lowest in the industry. Additionally, the company has a high operating profit to interest ratio of 2.83 times and a strong cash position with Rs 14.39 crore in cash and cash equivalents.

Technically, the stock is currently in a mildly bullish range and has shown improvement from a sideways trend on 12-Aug-24. Multiple technical indicators such as MACD, Bollinger Band, KST, and OBV are also showing bullish signals for the stock.

The majority shareholders of Shri Keshav Cements & Infra are the promoters, indicating their confidence in the company's performance. The stock has also outperformed the BSE 500 index in the long term, generating 79.52% returns in the last year.

However, the company does have a high level of debt and weak long-term fundamental strength. Its debt-to-equity ratio is at 0 times, and its return on capital employed is only 8.70%, indicating low profitability per unit of total capital. The stock also has an expensive valuation with an enterprise value to capital employed ratio of 2.1.

Despite these concerns, the stock is currently trading at a discount compared to its historical valuations. In the past year, while the stock has generated a return of 79.52%, its profits have risen by 296.9%, resulting in a low PEG ratio of 0.2.

Overall, Shri Keshav Cements & Infra has shown promising results in the recent quarter and has received a 'Hold' rating from MarketsMOJO. However, investors should carefully consider the company's high debt and weak long-term fundamentals before making any investment decisions.