Steel Exchange India Receives 'Hold' Rating from MarketsMOJO, Shows Positive Results and Attractive Valuation

Steel Exchange India, a smallcap company in the steel/sponge iron/pig iron industry, has recently received a 'Hold' rating from MarketsMOJO on September 12, 2024. This upgrade comes after the company reported positive results in June 2024, with a higher PAT (HY) of Rs 22.33 crore.
Technically, the stock is currently in a Mildly Bullish range and both the MACD and KST technical factors are also Bullish. Additionally, with a ROCE of 7.3, the company has an attractive valuation with a 1.9 Enterprise value to Capital Employed. The stock is also trading at a discount compared to its average historical valuations. Over the past year, the stock has generated a return of 30.70%, while its profits have risen by 126.1%. The PEG ratio of the company is 0.7, indicating a potential undervaluation.

However, Steel Exchange India also has some weaknesses. It is a high debt company with weak long-term fundamental strength. Its net sales have only grown by an annual rate of 2.06% over the last 5 years, and its debt to equity ratio (avg) is at 3.77 times. The company has also been able to generate a low Return on Capital Employed (avg) of 6.30%, indicating low profitability per unit of total capital (equity and debt).

Another concern is that 61.25% of the promoter shares are pledged. In times of falling markets, this can put additional downward pressure on the stock prices.

In conclusion, while Steel Exchange India has shown positive results and has a bullish technical outlook, it also has some weaknesses that investors should consider before making any investment decisions. MarketsMOJO's 'Hold' rating suggests a neutral stance on the stock, and investors should carefully evaluate all factors before making any decisions.