Som Distilleries & Breweries downgraded to 'Hold' by MarketsMOJO, but shows strong financial performance.

Som Distilleries & Breweries, a smallcap company in the breweries industry, has recently been downgraded to a 'Hold' by MarketsMOJO on May 27, 2024. This decision was based on the company's current financial performance and technical trends.
While the company has shown a healthy long-term growth with an annual rate of 26.63% in Net Sales, its Operating Profit has also seen a significant increase of 59.42%. In fact, the company has declared positive results for the last 9 consecutive quarters, with the latest being in March 2024. Its ROCE (HY) is also at a high of 18.37%, indicating a strong return on capital employed.

However, the technical trend for the stock is currently sideways, showing no clear price momentum. This is a significant change from the previous trend of being mildly bullish on May 27, 2024, resulting in a -5.27% return since then.

On the valuation front, Som Distilleries & Breweries seems to be trading at a discount compared to its average historical valuations. Its ROCE of 17.9 also makes it a very attractive investment option with a 3.8 Enterprise value to Capital Employed. Additionally, the stock has generated a return of 54.17% in the past year, while its profits have risen by 43.5%, resulting in a PEG ratio of 0.8.

Moreover, the promoters of the company have shown high confidence in its future by increasing their stake by 0.53% in the previous quarter, currently holding 35.26% of the company. This is a positive sign for investors as it indicates a strong belief in the company's growth potential.

However, Som Distilleries & Breweries does have a high Debt to EBITDA ratio of 0 times, indicating a low ability to service debt. This is further supported by its Return on Equity (avg) of 7.23%, signifying low profitability per unit of shareholders' funds.

Despite these factors, the company has consistently outperformed BSE 500 in the last 3 annual periods, making it a promising investment option for the long term. Investors are advised to hold onto their stocks and monitor the company's performance closely.