Somi Conveyor Beltings Receives 'Hold' Rating from MarketsMOJO, Shows Strong Growth in Net Sales and PBDIT

Somi Conveyor Beltings, a microcap company in the rubber products industry, has recently received a 'Hold' rating from MarketsMOJO on November 18, 2024. This upgrade comes as the company's net sales have shown a growth of 35.6% at Rs 34.09 crore and its PBDIT has reached a record high of Rs 3.82 crore. Additionally, the operating profit to net sales ratio has also reached its highest at 11.21%.
Technically, the stock is in a mildly bullish range and has shown an improvement from sideways trend on October 7, 2024. Since then, it has generated a return of 14.24%. Multiple factors such as MACD, Bollinger Band, and KST are also indicating a bullish trend for the stock.

Attractive valuation is another positive aspect for Somi Conveyor Beltings, with a price to book value of 2.7 and a discount compared to its average historical valuations. In the past year, the stock has generated a return of 67.86%, while its profits have risen by 32.3%. The PEG ratio of the company stands at 1.1.

The majority shareholders of the company are the promoters, which is a good sign for investors. Somi Conveyor Beltings has also outperformed the market (BSE 500) with a return of 67.86% in the last year, compared to the market's return of 23.90%.

However, the company's long-term fundamental strength is weak with an average return on capital employed (ROCE) of 7.05%. Its net sales and operating profit have shown a slow growth rate of 10.64% and 8.15%, respectively, over the last 5 years. Additionally, the company's ability to service its debt is also weak with a poor EBIT to interest ratio of 1.84.

Overall, Somi Conveyor Beltings shows potential for growth in the short term, but its long-term fundamentals need improvement. Investors are advised to hold their positions for now and keep an eye on the company's performance in the future.