Southern Petrochemical Industries Corporation Upgraded to 'Hold' by MarketsMOJO: Strong Fundamentals Make it a Good Investment Option

Southern Petrochemical Industries Corporation, a smallcap company in the fertilizer industry, has recently been upgraded to a 'Hold' by MarketsMOJO. This upgrade is based on several factors that make the stock a good investment option.
One of the main reasons for the upgrade is the company's strong ability to service its debt. With a low Debt to EBITDA ratio of 1.46 times, Southern Petrochemical Industries Corporation is in a good position to manage its debt and maintain financial stability.

In addition, the company has shown healthy long-term growth with an annual rate of 20.70% in operating profit. This indicates a stable and growing business, making the stock a good hold for investors.

From a technical standpoint, the stock is currently in a Mildly Bullish range, with the technical trend improving from Sideways on 08-Oct-24. This is supported by multiple factors such as Bollinger Band, DOW, and OBV, all of which are Mildly Bullish.

Moreover, with a ROCE of 15.7 and an attractive valuation of 1.5 Enterprise value to Capital Employed, the stock is trading at a discount compared to its average historical valuations. This makes it an attractive option for investors looking for a good deal.

However, the company did report flat results in Jun 24, with a growth of 103.37% in INTEREST(HY) and a decline of -27.81% in PAT(9M). Additionally, the NET SALES(HY) also saw a decline of -29.12%. This may be a cause for concern for some investors.

It is also worth noting that despite its size, domestic mutual funds hold only 0.01% of the company. This could be due to the fact that they have the capability to conduct in-depth research on companies and their small stake may signify either a lack of comfort with the price or the business.

In the last 1 year, Southern Petrochemical Industries Corporation has underperformed the market, generating a return of 15.49% compared to the market's (BSE 500) returns of 35.27%. This may be a red flag for some investors, but with the recent upgrade to 'Hold' and the company's strong fundamentals, it may be a good time to consider investing in this smallcap fertilizer company.