Supertex Industries Receives 'Hold' Rating After Positive Q4 Results and Bullish Technical Indicators

Supertex Industries, a microcap textile company, has recently received a 'Hold' rating from MarketsMOJO. This upgrade comes after the company reported positive results in December 2023, with a higher profit after tax of Rs 0.11 crore and a 58.79% growth in net sales compared to the previous quarter. Additionally, the company's operating profit to net sales ratio was at its highest at 11.54%.
Technically, the stock is currently in a mildly bullish range and has shown improvement since April 26, 2024, with a return of 2.59%. The MACD and Bollinger Band technical factors also indicate a bullish trend.

With a ROCE of 4.1, Supertex Industries has a very attractive valuation with a 0.7 enterprise value to capital employed. The stock is currently trading at a discount compared to its average historical valuations. In the past year, while the stock has generated a return of 6.91%, its profits have increased by 78%, resulting in a PEG ratio of 0.

The majority shareholders of Supertex Industries are non-institutional investors. However, the company has weak long-term fundamental strength with a -4.42% CAGR growth in net sales over the last 5 years. It also has a high debt to EBITDA ratio of 5.84 times, indicating a low ability to service debt. The company's return on equity (average) is at 1.57%, which signifies low profitability per unit of shareholders' funds.

In the last year, Supertex Industries has underperformed the market, with a return of 6.91% compared to the market's (BSE 500) return of 36.89%. While the stock may not be a strong buy recommendation, it may be worth holding onto for potential future growth.