Sukhjit Starch & Chemicals Receives 'Hold' Rating from MarketsMOJO Based on Current Performance and Future Potential

Sukhjit Starch & Chemicals, a microcap company in the chemicals industry, has recently received a 'Hold' rating from MarketsMOJO on October 7th, 2024. This downgrade is based on the company's current performance and future potential.
Despite a healthy long-term growth rate of 39.08% in operating profit, the company's recent results in June 2024 have not been as positive. Its operating profit to interest ratio is at its highest at 4.52 times, and its cash and cash equivalents are also at a high of Rs 15.56 crore. However, its dividend payout ratio is at its highest at 25.01%, indicating that the company may not be utilizing its profits effectively.

Technically, the stock is in a mildly bullish range with its MACD and KST technical factors also showing a bullish trend. With a ROCE of 12.6, the company has an attractive valuation and a low enterprise value to capital employed ratio of 1.4. Additionally, the stock is currently trading at a discount compared to its average historical valuations.

However, despite these positive factors, the stock has underperformed the market in the last year with a return of only 14.97%, while the market (BSE 500) has generated a return of 33.39%. This could be due to the fact that domestic mutual funds, who have the capability to conduct in-depth research, hold only 0% of the company's shares. This could indicate that they are not comfortable with the current price or the business of the company.

In conclusion, while Sukhjit Starch & Chemicals may have potential for long-term growth, its recent performance and lack of interest from domestic mutual funds suggest a 'Hold' rating for now. Investors should keep an eye on the company's future results and market performance before making any investment decisions.