Sudal Industries Receives 'Hold' Rating from MarketsMOJO After Record High Profits in Q1 2024

Sudal Industries, a microcap company in the aluminium industry, has recently received a 'Hold' rating from MarketsMOJO on June 11, 2024. This upgrade comes after the company reported positive results in the quarter ending March 2024. The company's PBDIT (profit before depreciation, interest, and taxes) reached a record high of Rs 2.95 crore, while its operating profit to net sales ratio was at its highest at 8.47%. Additionally, the company's PBT (profit before tax) less OI (other income) also saw a significant increase, reaching Rs 1.72 crore.
From a technical standpoint, the stock is currently in a bullish range and has shown improvement from a mildly bullish trend on June 11, 2024. Multiple factors, such as MACD, Bollinger Band, and KST, indicate a bullish trend for the stock.

With a ROCE (return on capital employed) of 13.9%, the stock is currently trading at a fair value with an enterprise value to capital employed ratio of 1.4. This is in line with the company's average historical valuations. In the past year, the stock has generated a return of 818.80%, while its profits have increased by 87.3%.

Sudal Industries has outperformed the market (BSE 500) with a return of 818.80% in the last year, compared to the market's return of 36.93%. However, the company's long-term fundamental strength is weak, with an average ROCE of 0% and poor growth in net sales and operating profit over the last 5 years. The company also has a high debt to equity ratio of 0 times.

One concerning factor for investors is that 82.28% of the promoter shares are pledged. In a falling market, this can put additional downward pressure on the stock prices. Overall, while Sudal Industries has shown strong performance in the short term, its long-term fundamentals and high promoter pledged shares should be considered before making any investment decisions.