Steel Strips Infrastructures Receives 'Hold' Rating After Positive Quarter Results

Steel Strips Infrastructures, a microcap real estate company, has recently received a 'Hold' rating from MarketsMOJO on January 8, 2024. This upgrade comes after the company declared very positive results for the quarter ending September 23, with a growth in net sales of 18.52%. In fact, the company has shown positive results for the last two consecutive quarters, with a ROCE (HY) of 40.35% and a debtors turnover ratio (HY) of 6.71 times, both being the highest in the industry.
Technically, the stock is currently in a bullish range and has shown a 7.65% return since January 3, 2024. The technical trend has also improved from mildly bullish to bullish, with multiple factors such as MACD, Bollinger Band, KST, and OBV all indicating a positive outlook for the stock.

The majority shareholders of Steel Strips Infrastructures are the promoters, which is a positive sign for investors. The company has also shown a market-beating performance in the long term, with a return of 36.18% in the last year and outperforming BSE 500 in the last 3 years, 1 year, and 3 months.

However, the company's long-term fundamental strength is weak due to operating losses and a poor EBIT to interest ratio of -1.26, indicating a weak ability to service its debt. The company has also reported losses, resulting in a negative ROCE.

Moreover, the stock is currently trading at a risky level compared to its historical valuations. While it has generated a return of 36.18% in the past year, its profits have only increased by 733.4%. This could be a cause for concern for investors.

In conclusion, while Steel Strips Infrastructures has shown positive results and a bullish trend in the short term, its weak long-term fundamental strength and risky valuation make it a 'Hold' for now. Investors should keep an eye on the company's performance in the coming quarters to make an informed decision.