Surana Telecom and Power Shows Strong Returns Amidst Long-Term Profitability Concerns

Surana Telecom and Power has recently undergone an adjustment in its evaluation, reflecting a shift in its technical outlook. The stock has demonstrated notable performance metrics, including a significant return of 33.99% over the past year, which contrasts with the BSE500's performance during the same period. Additionally, the company has shown a robust return of 114.79% over the last three years, indicating a strong long-term trajectory.
Despite these positive returns, the company faces challenges in its long-term fundamental strength, highlighted by a -212.69% CAGR growth in operating profits over the past five years. The ability to service debt remains a concern, with an average EBIT to interest ratio of -0.83. However, recent financial results for Q1 FY25-26 have shown positive developments, including a higher PAT of Rs 21.96 crore and a record ROCE of 17.99%.

Moreover, promoter confidence appears to be on the rise, as they have increased their stake in the company by 0.76%, now holding 70.93%. This could signal a belief in the company's future potential, even amidst the noted risks.

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