Som Distilleries & Breweries downgraded to 'Hold' by MarketsMOJO, despite strong growth and attractive valuations

Som Distilleries & Breweries, a smallcap company in the breweries industry, has recently been downgraded to a 'Hold' by MarketsMOJO on July 12, 2024. This decision was based on the company's current performance and future potential.
The company has shown healthy long-term growth with an annual growth rate of 26.63% in Net Sales. In the last quarter of March 2024, the company declared very positive results with a growth in Operating Profit of 59.42%. This trend has been consistent for the past 9 quarters.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The stock has also underperformed in the market in the last year, generating negative returns of -9.06%. The company's ability to service debt is also a concern, with a high Debt to EBITDA ratio of 4.63 times.

On a positive note, the company's ROCE (HY) is at a high of 18.37%, making it a very attractive valuation with a 3.3 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations. Additionally, promoters have shown high confidence in the future of the business by increasing their stake in the company by 0.53% in the previous quarter.

Overall, while Som Distilleries & Breweries has shown strong growth and attractive valuations, the current technical trend and high debt levels are reasons for the 'Hold' rating. Investors should closely monitor the company's performance and future developments before making any investment decisions.